The Economics of the Social Determinants of Health and Health Inequalities: a Resource Book

THE ECONOMICS OF SOCIAL DETERMINANTS OF HEALTH AND HEALTH INEQUALITIES: a resource book

THE ECONOMICS OF SOCIAL DETERMINANTS OF HEALTH AND HEALTH INEQUALITIES: a resource book

WHO Library Cataloguing-in-Publication Data The economics of the social determinants of health and health inequalities: a resource book. 1.Socioeconomic factors. 2.Health care rationing. 3.Health status indicators. 4.Health status disparities. 5.Social justice. I.World Health Organization. ISBN 978 92 4 154862 5 (NLM classification: WA 525)

© World Health Organization 2013 All rights reserved. Publications of the World Health Organization are available on the WHO web site (www.who.int) or can be purchased from WHO Press, World Health Organization, 20 Avenue Appia, 1211 Geneva 27, Switzerland (tel.: +41 22 791 3264; fax: +41 22 791 4857; e-mail: [email protected]). Requests for permission to reproduce or translate WHO publications –whether for sale or for non-commercial distribution– should be addressed to WHO Press through the WHO web site (www.who.int/about/licensing/copyright_form/en/index.html). The designations employed and the presentation of the material in this publication do not imply the expression of any opinion whatsoever on the part of the World Health Organization concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. Dotted lines on maps represent approximate border lines for which there may not yet be full agreement. The mention of specific companies or of certain manufacturers’ products does not imply that they are endorsed or recommended by the World Health Organization in preference to others of a similar nature that are not mentioned. Errors and omissions excepted, the names of proprietary products are distinguished by initial capital letters. All reasonable precautions have been taken by the World Health Organization to verify the information contained in this publication. However, the published material is being distributed without warranty of any kind, either expressed or implied. The responsibility for the interpretation and use of the material lies with the reader. In no event shall the World Health Organization be liable for damages arising from its use. Photo credits: istockphoto.com/Robert Churchill (top); DFID - UK Department for International Development, creative commons (left); iStockphoto.com/Alida Vanni (right); Colectivo Ecologista Jalisco, creative commons (bottom). Design and layout by www.paprika-annecy.com Printed in Luxembourg Background

he strong links between socioeconomic factors or In 2012, the World Health Assembly passed resolution policies and health were documented in the World 65.8, which endorsed the Rio Political Declaration on T Health Organization (WHO) Commission on Social Social Determinants of Health and emphasized the Determinants of Health report. Yet even when health and need for “delivering equitable economic growth through health equity are seen as important markers of development, resolute action on social determinants of health across expressing the benefits of social determinants of health all sectors and at all levels”. Improving understanding interventions in health and health equity terms alone is of economic rationales for intersectoral policy and not always sufficiently persuasive in policy settings where programme interventions is therefore an important health is not a priority, or when trade-offs exist between component of work for countries implementing social health and other public policy objectives. determinants of health recommendations. For this reason, Previous research has shown that increased attention to WHO launched the Economics of Social Determinants policies across sectors that improve health and health of Health project to describe and discuss the potential equity requires better preparation with regard to knowledge for economic rationales to support the case for social on the economic rationales for interventions, and how determinants of health interventions, and to summarize intersectoral policies are developed and implemented. economic evidence in key public policy areas.

III Acknowledgements

he main researchers constituting the Research Health Systems Financing Department); Carlos Dora Team of the Economics of Social Determinants of and Ivan Ivanov (Protection of the Human Environment T Health project were Professor Marc Suhrcke, Ms. Department); Joe Kutzin and Saksena Prianka (Health Carmen de Paz Nieves, Professor Richard Cookson, and Systems Financing Department); Timo Ståhl (Chronic Dr. Lorenzo Rocco. Nicole Valentine (Ethics and Social Diseases and Health Promotion Department); Eva Pascoal Determinants of Health, WHO) was responsible for overall (WHO, Mozambique Country Office); Davison Munodawafa coordination of the project, including collaboration with (WHO/AFRO); and Tiiu Sildva (WHO intern). the Mexican Task Force. The project team acknowledges with gratitude contributions The collaboration with the Mexican Task Force on the global project is gratefully acknowledged. In this regard, specific from the following individuals and institutions: Maggie thanks go to Diego González, Philippe Lamy (formerly, WHO Davies and Chris Brookes (Health Action Partnership Representative, Mexico Country Office); Adolfo Martínez International); Felix Masiye (Department of Economics, Valle, Alejandro Figueroa-Lara, Paulina Terrazas and University of Zambia); James Humuza (School of Public Guadalupe López de Llergo from the Secretariat of Health Health, Rwanda); Howard Friedman and Alanna Armitage of Mexico, and Sofia Leticia Morales and Kira Fortune (United Nations Population Fund); Brian Lutz and Douglas from WHO/PAHO. The collaboration of the coordinating Webb (United Nations Development Programme); Xenia project team members from the Public Health Agency Scheil-Adlung (International Labour Office) and Claudia of Canada is also gratefully acknowledged, in particular Rokx (World Bank). Jane Laishes, James McDonald and Andrea Long. The external reviewers provided useful insights and The Global Task Force would also like to acknowledge with comments that are also gratefully acknowledged: Dr. Anton gratitude the discussions with WHO colleagues in internal E. Kunst (University of Amsterdam) and Dr. Ajay Tandon WHO meetings in Geneva, and with experts who were (World Bank). Carmel Williams and Isobel Ludford (Health assembled by WHO at the meeting on the economics of in All Policies Unit, Government of South Australia) are social determinants of health in October 2012. Experts at also thanked for their valuable contributions to messaging. the meeting included nominations from the WHO Regional The technical editing support of John Dawson is also Office for Africa, experts representing United Nations acknowledged with gratitude. agencies and experts from nongovernmental agencies. Any errors or omissions are the fault of the project team Specific thanks are extended to colleagues from WHO, alone. as follows: Rüdiger Krech and Eugenio Villar (Ethics and Social Determinants Department); Dan Chisholm (Mental Funding for this project was provided in part by the Public Health and Substance Abuse Department; previously Health Agency of Canada.

IV Contents

Executive summary...... 01 Background...... 01 How do economists approach the assessment of economic motivation?...... 01 Economic arguments for investment in the social determinants of health...... 02 Basic economic rationales...... 02 Value for money...... 02 Findings in specific public policy areas with implications for health...... 02 Research gaps...... 04 Chapter 1. Introduction...... 05 1.1 Why this resource book?...... 05 1.2 Using this resource book...... 06 1.3 How were sectors chosen?...... 08 1.4 How are interventions classified?...... 08 1.4.1 Intersectoral public policy and action perspective ...... 09 1.4.2 Intervention evidence review orientation...... 09 References...... 11 Chapter 2. The economic argument for social determinants of health and socially determined health inequalities...... 13 2.1 Efficiency-based rationales for public policy intervention...... 14 2.2 S tandard efficiency-based rationales...... 16 2.2.1 Imperfect or asymmetric information...... 16 2.2.2 Externalities...... 16 2.2.3 Public goods...... 19 2.2.4 Departures from rationality...... 19 2.3 N on-standard economic rationales: behavioural economics...... 21 2.4 E quity-based rationale for public policy intervention...... 22 2.5 T he relationship between efficiency and equity...... 26 2.5.1 The standard viewpoint...... 26 2.5.2 T he standard viewpoint: when is it less valid?...... 26 2.5.3 T he macroeconomics viewpoint: traditional and new evidence...... 27 References...... 30 Chapter 3. Assessing value for money of interventions...... 33 3.1 Valuing the consequences of social determinants of health interventions...... 33 3.1.1 Valuing costs...... 33 3.1.2 Cost–effectiveness and cost–utility analysis...... 34 3.1.3 Cost–benefit analysis...... 35 3.1.4 Conclusions ...... 37 3.2 Valuing reductions in health inequities...... 38 3.2.1 Valuing reductions in health inequities in cost–effectiveness analysis...... 38 3.2.2 V aluing reductions in health inequities in cost–benefit analysis...... 39 3.2.3 Conclusions ...... 39 3.3 C hallenges in assessing the value for money of social determinants of health interventions...... 41 References...... 44

V Chapter 4. Can education policy act as health policy?...... 47 4.1 Efficiency-based rationales...... 47 4.1.1 E conomic benefits of education and the presence of market failures ...... 47 4.1.2 D oes education have an impact on health?...... 48 4.1.3 A verage impact of education interventions...... 48 4.2 Equity-based rationales ...... 50 4.2.1 Equity aspects in education...... 50 4.2.2 Equity impacts of interventions...... 51 4.3 Value for money...... 52 4.4 Conclusions...... 54 References...... 64 Chapter 5. Can social protection act as health policy?...... 73 5.1 Efficiency-based rationales...... 73 5.1.1 E conomic benefits of social protection and the presence of market failures...... 73 5.1.2 D oes social protection have an impact on health?...... 74 5.1.3 Average impact of social protection interventions...... 74 5.2 Equity-based rationales ...... 76 5.2.1 Equity aspects in social protection ...... 76 5.2.2 Equity impacts of interventions...... 77 5.3 Value for money...... 77 5.4 Conclusions...... 79 References...... 86 Chapter 6. Can urban development, housing and transport policy act as health policy?...... 93 6.1 Efficiency-based rationales...... 93 6.1.1 Benefits of urban development, housing and transport infrastructure and the presence of market failures...... 93 6.1.2 Does urban development and infrastructure have an impact on health?...... 94 6.1.3 Average impact of interventions ...... 95 6.2 Equity-based rationales...... 97 6.2.1 Equity aspects in urban development, housing and transport...... 97 6.2.2 Equity impacts of interventions...... 98 6.3 Value for money...... 99 6.4 Conclusions...... 101 References...... 109 Annex A. Looking beyond GDP: broader measures of well-being, welfare and prosperity...... 115 References...... 116 Annex B. Commission on Social Determinants of Health recommendations...... 119

Annex C. Literature review: methodology...... 123

VI The economics of the social determinants of health and health inequalities: a resource book

Boxes Box 1.1 Summary of sectors prioritized by CSDH...... 08 Box 2.1 The use of cost of health inequality evidence...... 13 Box 2.2 Economic evaluation studies answer questions relative to specific actions...... 14 Box 2.3 Examples of information imperfections ...... 17 Box 2.4 Examples of externalities ...... 18 Box 4.1 From resource- to incentive-based interventions in higher education in the United States...... 50 Box 4.2 Calculating the costs and benefits of early childhood education...... 53 Box 6.1 Urban HEART...... 101 Box C.1 Screening criteria...... 123

Figures Figure 1.1 Overview of resource book information...... 07 Figure 1.2 Types of interventions...... 09 Figure 1.3 Analytical framework...... 10 Figure 2.1 Relationships between different dimensions of inequality...... 23

Tables Table 2.1 Preferences on income equality...... 25 Table 2.2 Importance of eliminating big income inequalities...... 25 Table 3.1 Potential approaches to incorporate equity considerations into economic evaluations of social determinants of health interventions...... 40 Table 4.1 Education interventions: summary of health, economic and equity impacts...... 56 Table 5.1 Social protection interventions: summary of health, economic and equity impacts...... 81 Table 6.1 Urban development, housing and transport interventions: summary of health, economic and equity impacts...... 103

VII

Executive summary

Background How do economists approach n 2000, the World Health Organization (WHO) the assessment of economic acknowledged the need to further explore the relationship motivation? I between health and the economy by setting up the Commission on Macroeconomics and Health (CMH). One There are two fundamental components of the economic of the main conclusions of the work of CMH was that argument: investing in health could not only be of intrinsic value but could in addition produce important economic gains. • Establishing the basic rationale for public policy intervention. Establishing the basic rationale for public In response to the growing concern about equity issues policy intervention is needed because to economists and their implications for overall development, WHO public intervention is typically only an afterthought that established the Commission on Social Determinants of applies if – and only if – the market fails to “work well” Health (CSDH) in 2005, which focused on the “social in delivering satisfactory outcomes on average (the justice” or human rights arguments for health investments. efficiency-based rationale) or in terms of the distribution CSDH investigated the factors involved in the so-called of the outcomes (the equity-based rationale). “social gradient in health”, which refers to the large • Assessing whether the intervention represents observable differences in health outcomes within and good “value for money”. In order to mobilize between countries that are determined by avoidable investment in social determinants of health interventions, inequalities in the access to resources and power. there is a need to establish the value for money of CSDH aimed to further investigate the causes of health those interventions. However, the value for money inequities, with a deliberate detachment from economic of social determinants of health interventions may considerations, and provide advice on how to tackle them not be apparent, for several reasons: health impacts effectively. CSDH also reviewed evidence for action on a may not be fully (or at all) recognized in cost–benefit wider scope of interventions than CMH, many of which analyses; where compelling evidence of the benefits require intersectoral collaboration or advocacy. of social determinants of health interventions does exist, policy-makers in both the health sector and With CMH and CSDH having adopted different but perhaps other sectors may not be aware of it; and this lack complementary standpoints, it soon became clear that of knowledge may prevent public health advocates greater synergies had to be forged between the two. This from pointing out positive practices in other sectors WHO resource book on the economics of social determinants or from recommending policy health lenses or audits. of health and health inequalities seeks to begin to build a Knowing the benefits of particular policy interventions bridge between the two approaches by explaining, illustrating will therefore help the health sector to lend support and discussing the economic arguments that could (and to policies in other sectors that strengthen the could not) be put forth to support the case for investing determinants of health. To this end, exchange of in the social determinants of health on average and in the knowledge and disciplinary openness is part of the reduction in socially determined health inequalities. The growing practice of Health in All Policies and can help resource book has two main objectives: to establish or cement clear synergies between policies where they exist, or reveal tensions where they do not. • to provide an overview and introduction into how economists would approach the assessment of the economic motivation to invest in the social determinants of health and socially determined health inequities, including what the major challenges are in this assessment; • to illustrate the extent to which an economic argument can be made in favour of investment in three major social determinants of health areas: education, social protection, and urban development and infrastructure.

01 Economic arguments for economists will (understandably) want to find the least costly strategy to reach that goal. The income distribution investment in the social obtained through the workings of the market might not determinants of health be the one that maximizes social welfare. In other words, the social preference for equity might be different to the Basic economic rationales one produced by the market. To the economist, social determinants of health In more than a few cases (for example early child interventions can be justified both on efficiency and development) efficiency and equity have been shown to equity grounds. Traditional welfare economics makes have the potential to mutually enhance each other. In this a conceptual distinction between the two, but recent case policy-makers do not face the dilemma of having thinking and evidence is forging a closer, synergistic to choose between them; instead, they can have the link between them. Government interventions on social best of both worlds, thereby maximizing their chances determinants of health may be justified from an efficiency of support from across the political spectrum. perspective in instances of “market failure”, when the free market fails to allocate resources efficiently, for example Value for money due to imperfect information, existence of externalities, As mentioned above, there is a need to establish the value provision of public goods or non-rational behaviour. All for money of social determinants of health interventions. of these elements of market failure are of relevance to This is particularly important where policies and practices the social determinants of health. in other sectors are not aligned with positive impacts At the same time, achieving the goal of equity is considered on determinants of health and there may be arguments an important economic justification for public policy, even against this alignment. Economic evaluation evidence though it is harder to operationalize and more value laden does exist for social determinants of health interventions, than the efficiency rationale. Equity refers to a distribution but comes in very different shapes and sizes. However, of outcomes that is based on some notion or principle of most cost–benefit studies in policy areas related to the justice. Equity does not necessarily and naturally improve social determinants of health fail to capture the health as overall outcomes do, hence the potential need and effects. Hence, there is a need to consider those effects justification for public intervention. (and provide credible evidence for them), as they may alter the prioritization decisions that would otherwise be A concept of justice that is currently widely accepted based on understated returns of investment. While this among economists (and beyond) is that of substantive sounds straightforward in theory, it encounters a number equality of opportunity – the idea that individuals should of challenges in practice, in particular when it comes have the same opportunity to achieve outcomes such as to attribution of the changes in health outcomes to the high income or a long life, but do not necessarily need intervention in question, the valuation of the potentially to achieve the same outcomes due to freedom of choice. multifaceted benefits of the intervention, and incorporation Despite the widespread acceptance of the concept, and of distributional effects into the economic evaluation. the obvious relevance for arguments supporting the need to tackle health inequities, challenges remain in terms of precisely measuring the concept. Findings in specific public Recent economic thinking and evidence is forging a closer, policy areas with implications synergistic link between efficiency and equity. The idea of a trade-off between equality and efficiency is likely for health to have been overemphasized. In reality, neoclassical The resource book reviews and discusses the existing economics indicates that redistribution does have a evidence in three major areas of social determinants price, but sometimes this price is worth paying. If there of health: education, social protection, and urban is a political decision to pay the price, neoclassical development, housing and transport infrastructure (for

02 The economics of the social determinants of health and health inequalities: a resource book

brevity, urban development and infrastructure). In each and some low-income countries, which have been of these areas, there are important market failures more systematically evaluated, or for some early child that can in principle justify public policy interventions. development programmes. Evidence on the effects For instance, credit markets providing loans to finance of insurance-based and universal social protection education might fail as creditors cannot observe the instruments is, however, more limited, not least due academic ability of the debtor and, hence, the student’s to the methodological challenges involved. probability of graduating, and they cannot prevent the • Interventions under the broad umbrella of “urban debtor from opportunistically reneging on his or her development” also show a range of positive effects obligation. The economic external benefits of education for individual and societal welfare, and a number accrue (for instance) to work teams whose productivity of assessments of their health effects have been increases due to the interaction among more educated undertaken. Interventions aimed at ensuring the people. Non-economic benefits of education are related affordability of housing, such as assisted rental to the higher degree of social cohesion and the higher programmes or measures to improve the internal standards of civilian cooperation that a more educated conditions of housing, appear to have a positive impact society typically achieves. For example, crime may on a number of health outcomes. More general urban fall and child rearing may improve in more educated development interventions, including slum upgrading in developing countries, also show positive health effects, communities. Positive externalities are also associated as do traffic-calming programmes. However, as with with the implementation of social protection schemes, other areas, most of the available evidence focuses on such as unemployment and requalification programmes, high-income countries, especially the United Kingdom as they counter the development of a black economy, and the United States. which the unemployed might look to for prompt support. Early child development interventions, such as preschool Moving beyond the sheer effectiveness evidence, the education and kindergarten services, alleviate parents resource book also reviews the direct evidence on value of a part of their duties and help especially mothers for money, usually in the form of cost–benefit analyses re-enter the labour market. An example from another that exist in the areas of interest: area is enhancing energy efficiency of buildings, which • In the domain of education, the cost–benefit evidence contributes to reduced emissions and pollution, to the tends to come mainly from early child education benefit of the entire neighbourhood. programmes, which typically show good value for money. The economic argument regarding the value for money of • In social protection, a number of economic studies any interventions hinges on the evidence of effectiveness have assessed the net benefits for targeted conditional in the first place. This is why for each of the areas a review cash transfer programmes in middle-income and some was undertaken of the extent to which interventions have low-income countries, as well as for some early child been found to be effective in achieving their desired development programmes. primary outcome (for example in terms of improving • Comparatively few studies in the field of urban educational outcomes) and in promoting health. development have assessed value for money of • The beneficial impact of interventions to promote interventions, with some important exceptions: there educational outcomes has been widely researched and is very favourable evidence for interventions that documented, at least with respect to early childhood improve internal housing conditions and traffic-calming education, and in high-income countries. However, programmes, both of which have factored in the few interventions in the area of education have been monetized health benefits. examined for their health effects. • A number of interventions or policies that could be subsumed under the heading of social protection have also been shown to promote people’s economic welfare and often their health. This is particularly the case for targeted conditional cash transfers in middle-income

03 Research gaps • There remain important challenges – in the absence of randomized experiments – in assessing the causal There are very good economic reasons, both from an impact of interventions on average health outcomes efficiency and an equity perspective, to invest in many and in particular on the distribution of health outcomes areas of the social determinants of health, including the across socioeconomic groups. three broad areas covered by way of illustration in this • The majority of “economic evaluation” or “value for resource book. More work is still needed, however, to build money” studies in these areas differ greatly in the evidence to support investment in the social determinants type of costs and benefits they take account of, and of health. The following limitations in current knowledge few studies take into account the potential or actual can help set the scope for future research: health effects on the benefit side of their evaluation. • The current evidence in many of the areas is biased • Existing studies tend not to incorporate distributional towards high-income countries. (equity) effects in cost–benefit evaluations.

04 Chapter 1. Introduction

n 2000 the World Health Organization (WHO) With CMH and CSDH having adopted different (though acknowledged the need to further explore the relationship complementary) standpoints, it soon became clear that I between health and the economy by setting up the greater synergies had to be forged between the two. Commission on Macroeconomics and Health (CMH). The In elaborating the economic rationale for addressing importance of such an effort was evident in view of the the social determinants of health, a new perspective large likely cost burden represented by certain diseases, needed to be added to that already put forward by CMH. as well as the growing need to maximize returns on public CMH focused on more narrowly defined personal health investment and prioritize public sector interventions. care services, such as vaccinations and the provision CMH, made up of 18 of the world’s leading economists, of needed drugs (for example antiretroviral treatment), public health experts, development professionals and whereas CSDH focused on the need for health to engage policy-makers, was created with the mandate to produce research and analysis on different issues, organized in intersectoral policies and programmes to address health in six working groups: (a) health, economic growth determinants. This resource book aims to complement and poverty; (b) global public goods for health; (c) the the CSDH work by explaining, illustrating and discussing mobilization of domestic resources for health; (d) health the economic arguments that could (and could not) be and the international economy; (e) improving health put forth to support the case for investing in the social outcomes for the poor; and (f) international development determinants of health on average and the case for assistance and health. One of the main conclusions of investing in the reduction in socially determined health CMH’s work was that investing in health – as defined inequalities – two issues that need to be kept distinct by a narrower set of health services and health system (though, as will be discussed, there may be overlap and functions – could produce important economic gains. indeed synergies between the two). This theme is also In fact, CMH estimates indicated that increased health relevant to efforts to apply the Health in All Policies investment of $66 billion per year above current spending approach in countries, with the purpose of improving would generate at least $360 billion annually as a result coverage of health services and removing barriers to of both direct and indirect economic benefits. population health and health equity. In 2005, and in response to the growing concern about equity issues and their implications for overall development, WHO created the Commission on Social Determinants of 1.1 Why this resource book? Health (CSDH), which focused on the “social justice” or For better or for worse, economic arguments are human rights arguments for health investments. CSDH persuasive. While values, frequently encoded in law, investigated the factors involved in the so-called “social establish a framework for appropriate action by individuals, gradient in health”, which refers to the large observable governments, business and civil society organizations, differences in health outcomes within and between economic evidence and arguments matter for deciding countries that are determined by circumstances in on action and priority setting. Which parts of society turn shaped by avoidable inequalities in the access to experience economic gains and which experience losses is resources and power (1). CSDH was aimed at further part of this discussion. Unfortunately, specialists working investigating the causes of health inequities, many of in public health are frequently ill equipped to participate which lie outside the direct control of ministries of health. in policy dialogues as economic factors are introduced to It maintained a deliberate detachment from providing the discussions. Even within the field of health financing, economic rationales, and providing advice on how to tackle it is only in recent decades that serious inroads have them effectively. The CSDH final report was launched in been made to developing clear analyses that illuminate 2008, and contained three overarching recommendations the evidence for reduction of out-of-pocket payments on to governments, as well as to civil society and private the economic grounds of both efficiency (for example, sector actors and development institutions: (a) improve failure to adhere to drug treatment regimes resulting daily living conditions; (b) tackle the inequitable distribution in drug resistance) and equity (for example, rights for of power, money and resources; and (c) measure and equal opportunities in relation to the initial conditions for understand the problem and assess the impact of action. producing societal welfare).

05 Public health specialists need to be more familiar with economic thinking and rationales for policy action. This Purpose of the resource book familiarity will enable them to participate in policy dialogues To provide economic arguments to guide policy- and to commission the right types of analyses to help makers on how to present the case for action on them make their case for or against policies impacting the social determinants of health and the social on health and health equity. This resource book aims to determinants of unfair, avoidable health inequalities provide people working within public health with a range (health inequities); and to summarize information of information pertaining to how economic rationales from available studies on health, economic and are constructed and what kinds of policy questions they other impacts of policies and actions affecting answer, and to review existing evidence on what the social determinants of health. health, economic and other impacts are of intersectoral actions that address the social determinants of health and health inequalities (sometimes referred to together, for brevity’s sake, as the “social determinants of health”). What are the social determinants of health? The social determinants of health are the conditions 1.2 Using this resource book in which people are born, grow, live, work and age. These conditions are shaped by the distribution of This resource book aims to make a modest contribution to money, power and resources at global, national compiling and disseminating the growing economic evidence and local levels – sometimes termed “structural and rationales for addressing determinants beyond those determinants” of health inequities. under the direct control of the health sectors. It also brings to While the social determinants of health include light the evidence in favour of more innovative intersectoral the broad societal factors such as education, health system practices. Figure 1.1 has been developed as housing and income that influence the health a guide for readers to access the most useful information of the population, social determinants of health to them. Although it is recommended to read the current inequalities (or inequities) are visible in the unequal chapter as well as chapters 2 and 3 to gain an overall distribution of the broad societal factors in a manner understanding of how the economics of social determinants that is unfair. Hence, reference to the “distribution of health has been analysed, chapters 4 to 6 are accessible of money, power and resources” that shape the to readers as separate sector-specific resources. “broad societal factors”, and related “conditions” experienced by particular population groups, is As the first publication of its kind by WHO, this resource frequently what is meant by “social determinants book contains many references. To increase their of health inequities or inequalities”. usefulness to the reader, the references have been located after each chapter to indicate the topics they While noting the difference between the terms are most relevant to. In this way, readers interested in “inequalities” and “inequities”, the term “inequalities” more in-depth information on particular themes can is used in this text with reference to the operational easily identify the appropriate resources. approach of measuring health inequities in terms of inequalities in opportunities between different Future editions and updates of this publication are planned. population groups. These outcome metrics are These editions will be updated with evidence and rationales typically disaggregated by wealth or income quintiles, for more sectors of the economy. For this first edition, education, sex, place of residence or ethnicity. funding limitations required efforts to be concentrated on See also: WHO website a few priority sectors with fair to robust available evidence, www.who.int/social_determinants/en/ and which met other criteria listed below. Hopefully, the framework presented and gaps highlighted by the resource book will also lead to a greater quantity and improved quality of evidence being produced in the coming five years.

06 Chapter 1. Introduction

Figure 1.1 Overview of resource book information

The origins of the idea of the topic for the Chapter 1 resource book, and why it matters, and what is its scope (see figure 1.2 and figure 1.3). GENERAL THEORIES AND EVIDENCE

The main economic concepts used by economists to justify public policy interventions Chapter 2 – i.e. efficiency and equity – here applied to the social determinants of health.

The challenges to making the “value for money” argument for social determinants of Chapter 3 health policies, where pathways are not always clear and there may be multiple benefits.

SPECIFIC PUBLIC POLICY SECTORS

Chapter 4: Chapter 5: Chapter 6: Can education policy Can social protection Can urban planning, act as Health policy? policy act as transport and Health policy? housing policy act Empirical evidence as Health policy? Empirical evidence Empirical evidence

07 Chapter 2 presents and illustrates briefly how an economic 1.3 How were sectors chosen? argument could be developed in favour of investment addressing the social determinants of health and socially Three specific government sectors will be the focus of determined health inequalities. There are two fundamental this analysis: education, social protection and urban components of the economic argument. The first is about development and infrastructure. The rationale for the establishing the basic rationale for public policy intervention. selection of these sectors is based on the following criteria: Such a rationale is needed because to economists public • the potential implications that intersectoral action under intervention is typically only an afterthought that applies each of these areas can have for health outcomes if, and only if, the market fails to “work well” in delivering and health inequalities directly or through the social satisfactory outcomes “on average” (the efficiency-based determinants of health; rationale), or in terms of the distribution of the outcomes • the amount of available empirical evidence on the (the equity-based rationale). The second component of the impact of interventions within these three sectors economic argument assesses whether the intervention relative to others; represents good value for money – the cost–benefit criterion. Several so-called cost–benefit assessments • the interest of including interventions that are designed exist in areas relevant to the social determinants of and implemented at different government levels, health. While this evidence may be known to the policy- including the central, regional and local levels; makers from relevant sectors, it may be less known to • the categories prioritized by CSDH and its the public health person trying to advocate investment recommendations (box 1.1 and annex B). in the social determinants of health. Many cost–benefit studies in policy areas related to the social determinants Box 1.1 Summary of sectors prioritized by CSDH of health do however fail to capture the health effects. The conclusions of the CSDH report highlight three Hence, there is a need to consider those effects (and different objectives to be attained in order to reduce provide credible evidence for them), as they may alter the socioeconomic inequities that hinder health equitable prioritization decisions that would otherwise be based on outcomes. The first and main one is to improve the understated returns of investment. Chapter 3 then goes conditions of daily life. For this purpose, several areas on to discuss in some more detail the challenges of the are identified, including early child development and economic argument that revolve in particular around education, urban and rural development, climate the “value for money” assessment. The main challenges change, social protection, employment and universal include the attribution of the changes in health outcomes health care. to the intervention in question and the valuation of the potentially multifaceted benefits of the intervention. 1.4 How are interventions Chapters 4 to 6 present the empirical evidence that can be used to inform public health actors in intersectoral classified? policy dialogues on relevant social determinants of health. Across sectors, interventions will be classified using two different perspectives: (a) based on the conventional What economic evidence is synthesized? economic distinction between resource-based, information-based and incentive-based interventions; The evidence presented focuses mostly on and (b) according to the degree to which the health interventions relevant where: sector is involved in them. Resource-based interventions • public policy-makers or other government actors throughout all sectors mainly aim to increase or expand and health work together in partnership; the resources available to attain specific objectives. This • public policy-makers or other government actors is the most common type of intervention throughout lead the intervention with actual (or potential) the world, and includes for instance the provision or support from health. expansion of access to facilities for early child care or education at all levels. Information-based interventions in

08 Chapter 1. Introduction

turn aim to improve the information available to potential Figure 1.2 Types of interventions or actual beneficiaries of programmes or services, such as with regard to housing options. Finally, incentive- based interventions aim to modify the existing incentive Type 3 structures with the purpose of achieving certain public objectives, including for instance changes in unhealthy Urban Health development or potentially risky behaviours regarding transportation Types 1 or diet and exercise. and 2

Types 1 Type 3 1.4.1 Intersectoral public policy and 2 and action perspective

With regard to health sector involvement, the resource Type 3 book makes a general distinction between the following Social Education kinds of interventions (depicted in figure 1.2): Protection

• Type 1: health sector led. Interventions that involve Type 3 Type 3 different sectors but fall within the explicit domain of health sector work, and where health policy practitioners generally lead the decision-making process; examples of this kind of intervention include 1.4.2 Intervention evidence nutritional supplementation programmes. review orientation • Type 2: cross-sectoral with health. Interventions The review of interventions is based on a life-cycle with potential health impacts that do not fall under approach. This analytical framework, represented in figure the health sector space but where intersectoral 1.3, is based on the realization that health inequities collaboration is most often present, and where health and inequality in general vary with age, which might policy practitioners would thus need to identify and be related to the different health-related risks and make the case for specific interventions at the expense outcomes that each stage of life entails. The downward of others; for instance, a comprehensive early child pointing blocks in figure 1.3 show on which part of the development intervention. life cycle, which is dichotomized simply as childhood or • Type 3: other sectors lead. Measures that can have adulthood, the reviewed interventions focused. A life-cycle an effect on health but where the health sector and approach, which emphasizes the role of the accumulation of disadvantage over the life course, is therefore helpful to potential health outcomes are not considered in general, better understand how varied factors operate at different and therefore where health sector policy-makers would stages of life and contribute to the development of future be more in need of theoretical and evidence-based health inequalities. In particular, there is wide consensus support as outcomes relate to other sectors, as well on the relevance that childhood can bear, as the period as health, in order to enter a potential dialogue with when most lifelong inequities affecting health start. the leading sectors; for instance, measures to expand education at different levels or parental benefits. The review pays attention to the social norms and cultural components and outcomes of different interventions, Although this resource book aims to cover the three but acknowledges the need for more work, possibly types of interventions, it has a special focus on those to be carried out for future editions, to do sufficient under types 2 and 3, where the need for theoretical and justice to this topic. Social norms and culture prove evidence-based arguments to inform cross-sectoral to have important implications for health- and health dialogues is more pressing. equity-related outcomes. As an example, maternal health

09 or family planning-related issues are often determined by Under each of the selected sectors across these countries, cultural and societal stereotypes and values. Therefore, the evidence of the impact of specific interventions has interventions aimed at improving health-related outcomes been analysed. The choice of specific interventions was in these areas will need to pay attention to those cultural based on the quantity and quality of evidence available, and social norms in their design and development, which has generally biased the review towards high- and incorporate a change in those beliefs as part of income English-speaking countries with liberal welfare their objectives. Otherwise, and in many instances, the systems and developing countries (middle and low income) effectiveness of interventions may be undermined. with emerging, informal or insecure welfare states. In addition, interventions with larger potential and observed Significant differences can be observed across interventions interactions with the health sector, and where the need depending on the specific country context. The level of for evidence-based arguments to make the health sector income and the kind of welfare system are expected to case was more clear, have been prioritized (in this sense, determine the type of programmes (and evidence) found. and as indicated before, the focus of analysis has been on In this sense, universal social protection programmes type 2 and 3 interventions). The relevance of the specific tend to be more common or consolidated in high-income interventions with regard to the social determinants of countries, especially those with continental European health as featured in the CSDH report (annex B), their welfare states; on the other hand, targeted programmes general exemplarity, and the maximum degree possible are more often found in developing and English-speaking of diversity with regard to the country contexts and the high-income countries. In this sense, the literature review government level at which they are normally developed methodology (annex C) makes a distinction based on and implemented, were further considered for the selection. those two aspects: on the one hand, the level of income, Although the review of evidence concerning specific based on the World Bank classification for lending (high interventions has not been exhaustive, a detailed scoping income, low income, lower middle income and upper and review methodology (described in annex C) has been middle income); on the other, the type of welfare state, used for the identification and analysis. based on Muntaner (2), which differentiates between insecure, informal, social democratic, conservative, liberal and late democracy settings.

Figure 1.3 Analytical framework

Childhood Education Social Social protection norms and Urban culture Adulthood development

10 Chapter 1. Introduction

Key messages References 1. Closing the gap in a generation: health equity through action on the • Economic rationales for interventions on health social determinants of health. Final Report of the Commission on determinants are an important knowledge base Social Determinants of Health. Geneva, World Health Organization, for health policy-makers to be equipped with. 2008. 2. Muntaner C et al. Welfare state, labour market inequalities and • The two fundamental components of the economic health in a global context: an integrated framework. Gaceta rationales are the establishment of the basic Sanitaria, 2010, 24(Suppl. 1):56–61. rationale for public intervention; and the cost– benefit assessment for investment in the social determinants of health. • Impacts of inequality accumulate over the life course, positioning childhood as a critical time to intervene. • Culture and context matter and influence the process of implementation and outcomes from the interventions. These impacts need to be accounted for during planning.

11

Chapter 2. The economic argument for social determinants of health and socially determined health inequalities

raditional welfare economics, representative of Box 2.1 The use of cost of health inequality the neoclassical economic perspective, makes a evidence T conceptual distinction between the policy goals of improving equity and efficiency. On the one hand, policies When making a case for concern about health inequality, might be desirable from an equity perspective.1 Equity, it may be helpful to cite economic studies about the which refers to a distribution of outcomes that is based on overall economic costs of health inequality. Evidence of some notion or principle of justice, does not necessarily this kind may be particularly helpful when addressing and naturally improve as overall outcomes do and may finance ministers and other policy-makers outside thus require some degree of public intervention. On the the health sector, who do not see health inequality other hand, a government intervention may be justified as their primary concern. We shall call these studies from an efficiency perspective when resource allocation “economic burden” studies, to distinguish them clearly resulting from the private market produces less than from “economic evaluation” studies that compare optimal (and hence “inefficient”) outcomes, referred to as “market failure”. The following sections discuss first, the costs and the benefits of specific policy actions the efficiency argument as it applies to issues relevant to and which are discussed in the next section. Other the social determinants of health; and second, the equity authors use the term “economic impact” studies, but argument. Subsequently the relationship between the the term “economic burden” is used here in order two objectives is discussed. Most economists probably to dispel any potentially misleading implication that hold the view that the two typically cannot be achieved such studies attempt to identify the causal impacts simultaneously and that a decision therefore has to be or effectiveness of interventions for tackling health made at the societal and political level on how to trade inequality: they do not. off the two objectives. More recently, however, some Imagine you are addressing a minister responsible for research has shown that there may well be more than a few cases in which equity and efficiency can mutually a large public sector budget. You want to persuade enhance each other. In this case policy-makers do not the minister to take a specific action to tackle health face the dilemma of having to choose between the two inequalities. and can have the best of both worlds, thereby minimizing Question: How can you do this? political resistance. Answer: Economic burden studies can be used Typical cases that health wants to make in dealing with to highlight the size and importance of health other policy-makers relate either to the size of inequalities inequality as a policy problem; they cannot help (the need for action) or to arguments for specific types of to make the case for particular policy solutions. actions. Economics is useful in both instances. Box 2.1 describes one scenario. With respect to arguments for Question: Can evidence on the cost or burden of health specific actions, questions typically in the mind of a inequality help to make any of these arguments? policy-maker considering how to address determinants 1. The action will reduce health inequality. of health are: 2. The action will improve overall health and well-being. • Will the action reduce health inequality? 3. The action will save money and reduce public • Will the action improve overall health and well-being? expenditure. • Will the action save money and reduce public Answer: Unfortunately not. expenditure? Box 2.2 describes the basic information needs and analytical approaches used in each case, and chapter 3 describes these aspects of economic analysis in more detail. The next sections describe the assumptions and logic used 1 Equity refers to a distribution of resources that is based on some notion or principle of justice. Equality refers to the evenness of a in economic rationales, and upon which all frameworks distribution of resources. outlining costs and benefits of particular actions are based.

13 Box 2.2 Economic evaluation studies answer 2.1 Efficiency-based questions relative to specific actions rationales for public policy Imagine you are addressing a minister responsible for intervention a large public sector budget. You want to persuade the minister to take a specific action to tackle health The presence of economic costs attributable to ill health inequality. Imagine, further, that the action will require per se does not necessarily mean that there is reason additional expenditure from the minister’s budget over for government to act, from an economic perspective the next few years. You want to make three arguments: (see box 2.1 and box 2.2 for a discussion on the use of “economic cost” or “economic burden” evidence). 1. The action will reduce health inequality. A rationale for public policy intervention based on the 2. The action will improve overall health and well-being. economic perspective differs markedly from a public 3. The action will save money and reduce public health rationale. According to standard economic theory, expenditure. public intervention is justified when private markets fail to function “efficiently”. Efficiency is defined by economists Question: What evidence can help to make any of in a very specific way: an allocation of resources is these arguments? efficient if there is no way to increase benefits to an Answers: individual without making another individual worse off (this concept is known as “Pareto efficiency”). Likewise, Argument 1 requires effectiveness evidence about the an allocation is inefficient when it is possible to make one impact of the action on the health of different social individual better off without harming anyone else. Intuitively, groups. Information about the size and importance an inefficient allocation represents a certain waste of of the health inequality problem is not enough – the minister wants to know how this specific action will resources, either because there exist ways to produce influence health inequality. more (or more generally, achieve better outcomes) with the same amount of inputs or because some resources Argument 2 requires cost–effectiveness analysis or are assigned to individuals who value them less than cost–benefit analysis evidence about the net impact what other people are willing to pay for them. In these of the action on overall health and well-being – that cases there are possibilities of reallocation that allow is, the overall benefit minus the overall opportunity the economic system to prevent waste. When markets cost in terms of how the minister’s budget could have fail to achieve efficiency, there is scope for governments otherwise been spent. to intervene. Government interventions typically consist Argument 3 requires evidence about how this specific of regulations, direct production, taxation and, more action will save money and reduce public expenditure. generally, redistribution policies. Evidence that health inequality in general imposes high When markets achieve efficiency, the sovereignty of the costs on public budgets is not enough. The minister consumer – the overriding principle in standard economic wants to know what impact this specific action will textbooks – is hard to challenge. In this world view, have on public budgets – and, in particular, on the individuals are able to reach the maximum welfare possible minister’s own budget. and government intervention is but an afterthought. Indeed, The same logic applies to any kind of action in any any intervention would create distortions and produce policy area. It also applies to cases in which you want inefficient allocations. The efficiency situation, however, to persuade the minister to avoid taking a specific hinges on quite restrictive assumptions, difficult to be action that will increase health inequality. In that case, met in reality, in particular that: the minister wants to know how the specific action to • this decision-making is based on sufficiently accurate be avoided will increase health inequality, how it will – or “perfect” – information about the consequences harm overall health and well-being, and how it will waste of the decision (for example, that we are all fully money and increase public expenditure in the long run. informed of the consequences of the decision to smoke,

14 Chapter 2. The economic argument for social determinants of health and socially determined health inequalities

of limiting early exposure of children to language popular research in behavioural economics (2).2 This stimulation or of the iatrogenic causes associated body of work potentially adds further justifications for with preterm births); government interventions. According to this view, there • all the costs and benefits associated with a decision are are situations in which people act on the basis of what carried by the person making the choice (for example, has been called “bounded rationality”: because people that an individual will pay all the costs of an unhealthy may not at all times be able (or willing) to undertake lifestyle, including health care for chronic illness); all the necessary calculations to find the choice that maximizes their lifetime utility, they may find ways to • people act “rationally”, that is, they will always simplify choices. Or individuals’ preferences might not (consciously or unconsciously) weigh the costs and benefits of each decision they are to undertake and follow the pattern posited by standard welfare economic then choose the course of action that maximizes their theory. As a result of any of these imperfections the expected net benefits (or “utility”). actions may then well differ from what would have been the perfect rational choice, but the way in which they If these assumptions hold, then there is no economic differ may be predictable. This could offer an opportunity justification for government to prevent any individuals for governments to target those predictable “failures” in from taking their preferred decisions. decision-making and to help people take those decisions A traditional welfare economics perspective does, however, that they would have chosen, had they been in a position also acknowledge that there may be exceptions that to do so. The standard welfare economic rationale is occur if one or more of these assumptions are violated. first discussed below, then the behavioural economics In this case the “free market outcome” will probably perspective. The discussion will be illustrated with the be inferior to the efficient situation: in these cases the help of relevant social determinants of health examples. economists speak of “market failure”. Where markets have “failed”, people could in principle be made better off if government pulled the right levers. Government might then either step in and produce or deliver the relevant good or service, or it may incentivize others to do so. Which of the measures governments should opt for within this range depends on the nature of the market failure as well as the institutional capacity of the government (1). Related to each of the above critical assumptions, there are at least four potential sources of market failures that may be relevant as basic (partial) rationales for government intervention to address social determinants of health: imperfect information, externalities, public goods, and non-rational behaviour. Those market failures are called the “standard” efficiency-based market failures because they have commonly been discussed in the traditional welfare economics literature in all sorts of public policy contexts. Beyond the standard welfare economic view, a very different view has emerged, drawing on increasingly 2 The cause of behavioural economics was helped significantly by the Nobel Prize that was awarded to Daniel Kahnemann in 2002. This work and the resulting policy implications have been very successfully popularized by a book by Thaler and Sunstein (2).

15 Key messages: general

• Emerging evidence indicates that policies or • Testing whether the Pareto efficiency criterion is interventions can increase equity and efficiency met usually involves indirect assessments of a set – a win-win result. of assumptions or preconditions. If these are not • The rationale for public policy intervention based on met, it is highly likely that market outcomes are an economic perspective is different to one based inefficient in the Pareto sense. The assumptions on a public health rationale. include: • A particular resource allocation is judged to be > Decision-making is based on accurate (“perfect”) inefficient and requiring intervention if it is possible to information. make at least one person better off without harming anyone else – so-called “Pareto efficiency”. This > Costs and benefits associated with any decision is the logic behind the “consumer is king” idea. are carried by the person making the decision alone. • Efficiency-based economics assumes markets will deliver efficiency as consumers make rational > People act rationally in that they will always choices, with limited need for government make decisions to maximize their expected net intervention. gain (across time).

2.2 Standard efficiency-based might exploit the principal’s ignorance by performing a low-quality service while pretending it is high quality. These rationales behaviours can eventually lead to the closure of some markets. Credit and insurance markets are particularly 2.2.1 Imperfect or asymmetric information plagued by asymmetric information problems and even There are typically good reasons to believe that markets in developed countries are largely imperfect (and in the rural areas of developing countries they are virtually fail to produce optimal outcomes because of lack of absent) (box 2.3). information. If people do not have sufficiently accurate information on the costs and benefits associated with a particular course of action, they may invest less. For 2.2.2 Externalities example, parents investing in their child’s education may not be fully aware of the wide-ranging, monetary and So-called “internal” and “external” costs combined make non-monetary long-term benefits of education, in which up the total or “social” costs associated with a disease or a case they will invest less than they would, had they been risk factor. External costs and benefits begin where internal aware of those benefits. costs and benefits end and comprise all those costs and benefits that are not borne or taken into account by the Not only can information be imperfect but it can be also decision-maker. Drawing the line between internal and distributed asymmetrically in the market. Typically sellers external consequences is of critical public policy relevance. know the characteristics of the good they are selling Internal costs are the “private” costs borne by the individual, much better than buyers, and might thus be tempted knowingly or not, and are generally irrelevant to an argument to profit from this informational advantage by selling a for government intervention within the efficiency rationale. poor-quality good at a high price. Similarly, the person The most obvious internal costs associated with a disease commissioning a work or a service is less informed about are the individual’s morbidity and mortality costs, easily the the details of the technology and the costs of production greatest share of disease costs if converted into monetary compared to the one actually doing the work. The latter values.

16 Chapter 2. The economic argument for social determinants of health and socially determined health inequalities

drinking and, most of all, the financial costs for health care Box 2.3 Examples of information imperfections that are paid out of the public budget in countries where Information problems are acute for a number of the health system is funded by citizens’ taxes. The sum of markets involved in the provision of at least some the costs of an individual behaviour accruing on the rest social determinants of health. For instance, credit of the society is defined as external costs or “externalities”. markets providing loans to finance education might fail as creditors cannot observe the academic ability Some courses of action can also have external benefits. of debtors and, hence, the students’ probability of For instance, going to work by bike rather than by car graduating, and they cannot prevent debtors from reduces overall pollution in a city, while also benefiting opportunistically reneging on their obligations. Similarly, individual health. At the community level, creating green social protection schemes such as unemployment areas for children to play can improve the environmental benefits are often limited in their scope because the quality of the air as well as provide opportunities for insurer cannot tell whether workers lost their jobs physical activity by children and their families. Individuals because of a crisis or because they were caught tend not to factor those external effects, either positive shirking. Another example comes from the housing or negative, into their consumption choices. As a result, market. Rental properties are often less available than individual consumption of tobacco, alcohol or unhealthy would be otherwise desirable because persons renting foods, or unsafe sex, is often higher than is optimal from might decide not to pay and property owners have a societal “efficiency” viewpoint. Likewise, the number of little means to defend their property. In credit markets children playing in parks or people commuting by bike asymmetric information can be typically overcome may fall short of the social optimum. The market failure by means of adequate guarantees (collateral). This here manifests as a societal cost or benefit caused by strategy is however unavailable to the less well off an individual choice, and it justifies, in principle, a public that have few resources to provide collateral. policy intervention seeking to improve social welfare by modifying the opportunities for healthy individual behaviour. While modifying opportunities may be effectively Consider some unhealthy behaviour such as smoking, engaged in through intervening in expanding education excess drinking, overeating or lack of physical activity. quality and availability, the typical strategy governments These behaviours have a negative effect on individual adopt to discourage the consumption of those goods health and are the cause of several diseases. Degradation producing negative externalities is imposing a tax on them. of individual health has a cost (pain, reduced autonomy or To stimulate the behaviours that produce positive mobility, reduced productivity on the labour market) that is externalities the primary policy lever is to subsidize paid directly by the individual. With a (limited) world view them (for example, providing local government subsidies that identifies these behaviours as “rational”, all costs for swimming pools or parks in deprived areas). Positive accruing to the individual are defined as internal costs. In externalities, both economic and non-economic, are addition, smoking or excessive alcohol consumption can associated with investment in many social determinants have adverse effects on other people, either in the same of health, such as education, social protection, early child family or in society more broadly. Examples include second- development programmes and housing interventions hand smoking, violence and crime associated with binge (box 2.4).

17 Box 2.4 Examples of externalities A number of potential external benefits have for instance during unemployment spells, allowing the beneficiaries been associated with education, to name but one highly and their families to maintain adequate nutritiwon, shelter relevant social determinant of health. Those benefits and health care. At the same time they can also benefit can be economic or non-economic. Economic benefits society at large because they counter the development may arise in the employment sector, where modern of a black economy, to which the unemployed might look production techniques involve often close collaboration for prompt support. These benefits to “society at large” within teams. People who have invested more in their lead to the discussion of intangible public goods, such as education will increase not only their own productivity social cohesion and social capital. Methods are available but also that of their fellow workers. Non-economic to measure these latent traits of societies, for example benefits of education may arise from the socialization survey questionnaires and proxies for latent variables. function of education that may benefit society at large, Tracking social capital is important for understanding rather than just the individual. By contributing towards how these intangible public goods are being damaged or a common standard of citizenship, education will tend enhanced by decisions taken for or against government to produce a degree of social cohesion that is in most intervention. people’s interests. For instance, crime may fall and child Enhancing energy efficiency of buildings allows adequate rearing may improve in more educated communities. heating of a family’s home and at the same time (A contrary view is that in some cases education may contributes to reduced emissions and pollution, to the also lead to the questioning of accepted practices, which benefit of the entire neighbourhood. in turn may lead to social unrest that governments may respond to in a repressive manner.) Early child development interventions, such as preschool education and kindergarten services, alleviate parents A number of external benefits are associated also to of a part of their duties and help especially mothers other social determinants of health. For instance, social re-enter the labour market. protection schemes, such as unemployment benefits and requalification programmes, support individual income

As already mentioned, traditionally costs borne by all Quasi-externalities, the consequences of an individual’s members of a household were considered “internal”, poor health decisions for other family members, can and hence not policy relevant. Each family member was be manifold. An alternative view is that costs borne by implicitly assumed to have identical preferences, or the household members other than those engaging in unhealthy household head was assumed to have incorporated all behaviours should be considered as external. Because a preferences of other family members into his or her behaviour large share of the costs of smoking and other unhealthy and consumption choices. (Other household members behaviours occur within households, adding these costs to were assumed to have “bargaining power” that ensured any external cost estimate will greatly increase the external consideration of their preferences, certainly a problematic costs and thereby reinforce the rationale for government assumption, particularly in the case of children.) intervention (3). Very few studies, however, have tabulated this cost component. But this view is changing (although, empirically, this is a very challenging concept to test). Short of making a decision “Classical” externalities are derived from collectively financed on where exactly to draw the line between internal and programmes, such as health, disability and life insurance; external costs, Sloan et al. (3) have split the external costs pensions; and sick leave. These programmes are financed of smoking into traditional external costs and quasi-external by taxes and premiums that commonly do not differentiate costs; the costs borne by household members who are not between people who engage in unhealthy behaviour and participating in the choice are called “quasi-externalities” those who do not. From a broad, societal perspective some and may justify intervention, as they tend to be larger than of these programmes tend to incur external costs and others the external costs borne by wider society. external benefits, so the issue of whether smokers, heavy

18 Chapter 2. The economic argument for social determinants of health and socially determined health inequalities

drinkers or those engaging in other poor health habits “pay is excludable only to some extent. Consider the case of their way” becomes an empirical question. Other things information about the mechanisms of transmission of human being equal, individuals engaging in unhealthy behaviours immunodeficiency virus (HIV). Producing this information doubtless incur higher health care expenditures than those is costly, because it needs researchers, laboratories and who do not. Because those individuals tend not to pay higher specific investments. Consumers realize that once such premiums for health insurance, which would reflect their information is produced they will be able to obtain it for higher health care costs, many costs generated by their free via a range of media. Therefore they are not willing unhealthy behaviours are borne by the other contributors to pay and contribute to financing the production of this to the insurance. information. Governments can substitute markets and overcome this failure. By exploiting their power of coercion, However, people with poor health habits tend to die younger, governments can tax citizens and raise enough resources possibly as a result of lower socioeconomic position, reducing to finance research and provide its result to all citizens. the number of years they require financial support from collectively financed programmes. Several studies have As regards social determinants of health, often knowledge shown this effect of early death to be potentially large: it of the costs and especially the benefits of education are can outweigh the external costs represented by increased not prevalent across the whole population. Absence of health insurance costs, and it can outweigh the loss of this knowledge, even though it is available, is typically tax and premium payments (which finance many of these more pronounced among the less well off and at least in programmes). Contrary to popular belief, on a net financial part explains why the children of poorly educated parents basis society does not always “subsidize” people with poor tend to invest relatively little in education. Generating this health habits. information requires investments in research but once that investment is made, the dissemination and acquisition of 2.2.3 Public goods this information is marginally less costly. As with HIV/AIDS, this makes the case for government intervention to ensure Public goods are defined by economists as goods that appropriate knowledge is generated and made available are characterized by non-excludability and non-rivalry (4). so that not only those who are educated are able to take The first condition refers to the impossibility of excluding advantage of these public goods. The same can be said anybody from consuming the good in question. The second about the costs and benefits of new technologies of mobility condition refers to the fact that the consumption by one and construction and about the benefits of a well-balanced individual does not reduce the possibilities of consumption and appropriate diet. by any other individual. An example helps clarifying the meaning of these two conditions: street lighting is a public good because no one can be excluded from benefiting from 2.2.4 Departures from rationality it once it is provided and one person’s consumption does The assumption that people act rationally (that is, maximize not reduce the amount of good available to anybody else. their expected utility) represents a core pillar of economic thought that allows economists to derive “optimal” behaviour The essence of a public good is that it is impossible to make in a normative sense. Models of rational behaviour can also someone pay for it. Indeed, any individual can consume the explain and predict actual behaviour. It is as fundamental good without paying its price (due to its non-excludability). an assumption as the “reasonable person” is within the Furthermore, non-rivalry implies that, once a public good application of the law. Most economists would not approve is provided, it is not scarce. As scarcity is the fundamental dismissing the rationality assumption altogether, not least determinant of market prices, functioning markets are not because doing so would open the way to paternalism in a able to provide public goods and government intervention broad range of areas, under the pretext of “helping people is required. Admittedly, few goods are pure public goods. do what is best for themselves”. Many more are imperfect public goods, meaning that they are either approximately non-excludable or non-rival. Nevertheless, economists do recognize that in the Information, for instance, is an imperfect public good whose specific case of children and adolescents, the rationality importance cannot be understated. It is non-rival, but it assumption does not hold. Children and adolescents tend

19 not to take the future consequences of their choices into affects important social determinants of health areas such as account, irrespective of whether they are informed of education, and it is particularly obvious in the consumption future consequences. They act “myopically” and, hence, of addictive goods, especially tobacco. Smoking behaviour non-rationally (5).3 Their choices may well conflict with is overwhelmingly established in adolescence. Some 80% their long-term best interests. This provides, in principle, of adult smokers in the United States reportedly started a justification for government intervention: to prevent them smoking before the age of 18 (6). Young people do not from harming themselves when they do not fully appreciate take into account the risk of becoming addicted to nicotine the consequences. Here, we do see privately borne costs (again, even if informed of future consequences). Even that are relevant to public policy. without addiction, empirical evidence strongly suggests that health behaviours, for example concerning diet and Government intervention to prevent myopic behaviours physical activity, adopted while young are reliable predictors is particularly relevant when decisions or behaviours in of such behaviours in adulthood ( ). childhood and adolescence have long-lasting impacts. This 7–9

Key messages: standard efficiency rationales • Standard welfare economics acknowledges that > Traditionally, all costs borne by household free market outcomes do not always deliver the members were considered internal but there most efficient outcomes, due to the aforementioned is a growing recognition of the need to include market failures. They are called the “standard” quasi-externalities in costings. efficiency-based market failures because they have > Quasi-externalities refer to intrahousehold impacts commonly been discussed in the traditional welfare of choices of a single member, particularly in the economics literature in many public policy contexts. case of children, as a highly vulnerable group. • Related to efficient market preconditions or > Several studies show that early death may assumptions, there are typically four potential outweigh any externalities for society. Contrary sources of market failure: to popular belief, on a net financial basis society > imperfect or asymmetric information does not always subsidize people with poor health habits. > externalities > Public policy has a role in ensuring the distribution > public goods of health-related information in the population > non-rational behaviour. as a public good. • Efficient market preconditions or assumptions: > Although a core pillar of economics is that people > Information problems are acute for a number of act rationally, economists do realize that in large markets involved in the provision of some social groups of populations, in particular children and determinants of health. adolescents, the rationality assumption does not hold. Children and adolescents tend not to > Individuals tend not to factor external effects take the future consequences of their actions into their consumption choices. into account – the so-called “departure from rationality” phenomenon.

3 Consumers are considered “myopic” if they ignore the effects of current consumption on future utility when they determine the optimal or utility-maximizing quantity of an addictive good in the present. In technical terms, their discount rate is infinite. Some authors define myopic individuals as those that have a very high discount rate and attribute very little value to future consumption. In that definition, myopic behaviour can still be rational (as long as the discount rate does not become infinitely high). Here myopia is defined as irrational 20 behaviour, in line with for instance Pearce and Nash (5). Chapter 2. The economic argument for social determinants of health and socially determined health inequalities

2.3 Non-standard economic in one year. One year from now, if asked again to quit smoking, the smoker might prefer to continue smoking rationales: behavioural rather than adhere to the previous commitment to quit. economics As time progresses, each future date comes into the present and the preference for immediate enjoyment A new paradigm is slowly emerging in economics in will prevail. In other words, the present “self” of the response to the notion that assuming a sovereign, rational individual disagrees with his or her future “self”. As the and always well-informed consumer may not in all decisions of the present self do not take into account the instances help understand and predict people’s decisions consequences of its actions on the future self, it imposes and behaviour in daily life. The new approach, largely a type of externality on the future self. This is typically subsumed under the heading of behavioural economics, called an “internality” (or “intrapersonal externality”) offers a different or broadened set of rationales for why because the consequences remain “inside” the individual. governments may be justified in interfering with individual The potential relevance of time-inconsistent preferences decisions in general and in social determinants of health probably extends in particular to those social determinants areas in particular. While the traditional perspective may of health that involve some kind of cumulative investment have been that essentially all behaviour can be “rationalized” to begin at younger ages (such as education, participation (ex post explained as rational), the behavioural economics in elective health insurance or pensions schemes) and view of the world holds that there are situations in which could be influenced by time-inconsistent preferences people act with “bounded rationality” (10).4 In real-world (12, 13). Indeed, those individuals biased towards the decision-making, individuals have limited information present would prefer to reduce investment to be able about the possible alternatives involved in a choice to consume more and obtain an immediate pleasure. problem and have insufficient computational ability to The result would be underinvestment in education, and evaluate and rank all alternatives. These limitations bound late entry in welfare programmes or the use of health the individual’s process of maximization and force people services. to chose options that are only satisfactory, rather than optimal (11). When the choice is particularly complex people adopt simplified procedures, based on habits or norms that simplify the task and guide behaviour, sometimes resulting in outcomes that are even counter Key messages: behavioural economics to their fundamental interests. • Behavioural economics respond to the emerging One important feature of this bounded rationality is the notions in economic theory, fuelled too by idea of “time-inconsistent preferences” or “hyperbolic neuroscience, psychology and other social science discounting”, which results in individuals accepting disciplines, that citizens and consumers do not instant gratification at the expense of their long-term always behave rationally because they operate best interests. In this model, a commitment made today in situations where they have bounded rationality – by a perfectly informed and rational individual who has – or limited information on a set of choices and time-inconsistent preferences – to act in a particular insufficient computational powers to choose the way in the future will be reneged upon at the point when optimal alternative. the commitment should be respected. For example, a • The result is that people experiencing bounded smoker asked today to stop smoking immediately will rationality are likely to underinvest in education probably answer no, but might agree to stop smoking and make late entries to welfare programmes, including the utilization of health care. 4 O’Donoghue and Rabin (10), representatives of the behavioural economics position, emphasise that “economists will and should be • These irrational behaviours generate certain ignored if we continue to insist that it is axiomatic that constantly costs for society that can potentially be avoided trading stocks or accumulating consumer debt or becoming a heroin addict must be optimal for the people doing these things merely through specific actions or interventions. because they have chosen to do it”.

21 2.4 Equity-based rationale for and progressive demonstration that the analysis of economic inequalities cannot be easily disentangled public policy intervention from inequalities in other outcomes. Figure 2.1 illustrates Equity concerns have been gaining relevance in recent the relationships between inequality in different social decades in policy-related research and practice. and economic dimensions, which can be transmitted This process has been partly driven by the confirmation between generations and are also affected by such of large social inequalities within and between countries, factors as gender or ethnic origin. These relationships which have persisted and in some cases increased are mediated by the institutional and policy setting, which throughout the 20th century even in high-income countries has the potential to counteract initial inequalities, thus that have introduced universal programmes of health helping to equalize outcomes and break intergenerational care, education and social protection against poverty. transmission cycles whereby disadvantage is passed These social inequalities include inequalities in health, down from parent to child. education and political participation, as well as inequalities A currently widely accepted concept of justice is that of in income and wealth. But what is meant by equity? And “substantive equality of opportunity”. Substantive equality why is it important from a policy-making perspective? of opportunity refers to the idea that individuals should Equity and equality are related but different concepts. have the same opportunity to achieve outcomes such Equity is necessarily an ethical concept, to do with social as high income or a long life, but do not necessarily justice or fairness. By contrast, equality can be thought of need to achieve the same outcomes due to freedom of as a factual concept, to do with the degree of “sameness” choice. Substantive equality of opportunity is a stronger of people in some relevant respect. In principle, inequality concept than formal equality of opportunity, which between individuals in the distribution of their income or focuses on non-discrimination in social and institutional health or any other variable of interest can be defined processes. For example, a highly educated person and as a purely mathematical property of that distribution, a poorly educated person may have formal equality of without necessarily making social value judgements about opportunity in the process of applying for a well-paid job, how far inequality is “unjust” or “unfair”. By contrast, but not substantive equality of opportunity to succeed inequity cannot be defined without making social value in getting the job. judgements about justice. Achieving equity would require A body of economic theory has now been developed to a fair distribution of resources. The concept of equity or define and measure substantive equality of opportunity, social justice is very broad, and does not have to focus drawing on the “liberal-egalitarian” tradition of political exclusively on variation in the distribution of income or theory that followed Rawls classic 1971 work, A theory health or some other good or bad outcome. In particular, of justice (15). In this economic theory, the outcome that there may be concerns about “procedural justice” in the each individual achieves is the result of two ingredients: social and economic processes that lead to a particular circumstances (family background, endowments, distribution, as well as concerns about variation in the exogenous shocks); and individual effort, or other variables resulting distribution. The concept of equity is complex, under personal responsibility (16). Inequalities due to and draws on myriad ideas of social justice or fairness circumstances are unfair and should be eliminated as from different and long-standing religious, philosophical much as possible, while inequalities due to unequal effort and political traditions. The importance of the concept should be considered acceptable. Measuring inequality of justice in history reflects a deeply rooted concern for of circumstances is not an easy task. There is no unique fairness among people in all societies and cultures (14). indicator, and the amount of data is quite challenging, given Traditionally, most inequality research has focused on that all circumstances need to be observed. Bourguignon et inequality in outcomes, and particularly on economic al. (17), among others, proposed a strategy to decompose inequalities. In recent years, however, there has income inequality due to circumstances and income been a shift in theory and practice towards a more inequality due to effort based on regression methods. multidimensional and broader concept and definition of inequality. This change has been based on the intuition

22 Chapter 2. The economic argument for social determinants of health and socially determined health inequalities

Figure 2.1 Relationships between different dimensions of inequality

Ethnic origin Interventions Human Inequalities in labour addressing development market outcomes discrimination differentials

Age

Gender Inequalities in Tax and welfare educational outcomes systems

Family background

Place of Inequalities in health Income birth Other policies outcomes differentials

Disabilities

Arguably, achieving substantive equality of opportunity obtain. In practice, however, there are substantial political is easier than achieving equality of outcome. In theory, constraints on imposing high inheritance taxes in the face achieving equality of opportunity could be done by of opposition from prosperous voters with much to lose, redistributing the inherited economic endowments substantial possibilities for avoiding high inheritance of each individual, and may not require continuous taxes by giving away or squandering private wealth, and intervention by the government at all stages of the life although financial wealth can be taxed it is hard to prevent course. The “market distortions” induced by redistributing people from passing on the non-financial advantages of inheritances could then be relatively moderate – compared “good parenting” to their children – at least not without to taxing and regulating economic activity across the collectivizing the care of children to an extent that most life course – and so a social consensus to achieve societies would consider unacceptable. equality of opportunity could in theory be easier to

23 Governments and international organizations have “altruistic punishment” (a propensity to impose sanctions progressively embraced the principle of substantive on others for norm violations) (14, 25, 26).5 equality of opportunity. The World Bank, for instance, has In addition to experimental evidence, other studies developed and started using a Human Opportunity Index provide support to the view that people tend to assign as one of the relevant indicators to assess social, human a positive value to fairness. A recent study of European and economic development aspects in Latin America ( ), 18 nations and the United States that relied on individual and is currently expanding its use to other regions, for answers about perceived happiness and on objective example the Middle East and North Africa. The 2010 Human income inequality measures found that “individuals background research paper Development Report Designing have a lower tendency to report themselves happy when

the Inequality-Adjusted Human Development Index (IHDI) inequality is high, even after controlling for individual also proposed a modification to the methodology used income, a large set of personal characteristics, and year to adjust the Human Development Index for inequality in and country … dummies” (27). Another recent analysis the distribution of each dimension (health, knowledge of several Organisation for Economic Co-operation and and income) across populations ( ). 19, 20 Development (OECD) countries based on data from the The measurement of equality of opportunity, however, International Social Survey Programme constructed a poses particular challenges. In the socioeconomic proxy measure of cross-national attitudes towards income literature it has been common to study equality of inequality. Osberg and Smeeding (28) found that citizens opportunity through correlation of intergenerational of most high-income countries appear on average to have income and educational or health outcomes (21) or similar attitudes towards inequality, generally thinking whether the children’s income is correlated with their that less well-paid professions should be paid more and parents’ socioeconomic, educational or health status. that better-paid professions should be paid less (14). Most studies to date show that parental background has The World Values Survey6 results confirm that a large a strong influence on an individual’s outcomes. Tomes share of people regardless of their background have a (22) finds that for poor families, family income has preference for equity (tables 2.1 and 2.2). an important effect on child’s educational attainment. Shea (23) finds that parental income is an important determinant of children’s income for poor families even after controlling for genetic transmission of ability. A fairly recent body of literature in behavioural economics sheds some light on shared human preferences for fairness 5 A classic example of this behaviour is represented by the Ultimatum and justice, on the basis of numerous experimental studies. Game, in which a player (the proposer) is asked to suggest a one-time division of a certain sum of money between himself or herself and As argued by Fehr and Fischbacher (24), for example, people another player, and this one (the responder) must accept or reject it. behave in ways clearly inconsistent with the rational self- Although standard game theory predicts a unique equilibrium where interest hypothesis, as they regularly show a willingness the proposer offers the smallest possible amount and the responder accepts it, evidence across hundreds of experiments in highly to engage in “altruistic rewarding” (a propensity to reward heterogeneous cultural circumstances and with different amounts others for cooperative, norm-abiding behaviour) and show that offers are substantially higher and, even so, rejections are often observed (25, 26). When the responder can choose between different proposers with all non-chosen proposers getting zero, a Nash equilibrium where all proposers offer the full amount or close to it is reached. This finding suggests that a sizeable fraction of human beings in most societies care not only about their own individual opportunities and outcomes but also about “fairness” (14). 6 The World Value Survey is a multicountry survey of individuals designed and sponsored by the Inter-university Consortium for Political and Social Research, based at the University of Michigan. The survey aims to “enable a cross-national comparison of values and norms on a wide variety of topics”. Four main waves have been fielded since the early 1980s.

24 Chapter 2. The economic argument for social determinants of health and socially determined health inequalities

Table 2.1 Preferences on income equality Key messages: equity-based rationales Preference Percentage Income should be made more equal 14.1 • Inequity cannot be defined without making social value judgements about justice. Achieving equity 2 4.8 would require a fair distribution of resources. 3 7.1 • The concept of equity or social justice is very 4 6.3 broad, and does not have to focus exclusively on 5 12.9 variation in the distribution of income or health or 6 8.4 some other good or bad outcome. In particular, 7 10.6 there may be concerns about “procedural justice” in the social and economic processes that lead 8 13.2 to a particular distribution. 9 6.9 • A widely accepted concept of justice is that of We need larger income differences 15.7 “substantive equality of opportunity”. Substantive as incentives equality of opportunity refers to the idea that individuals should have the same opportunity Table 2.2 Importance of eliminating big income to achieve outcomes such as high income or a inequalities long life, but do not necessarily need to achieve Preference Percentage the same outcomes due to freedom of choice. Very important 31.6 • There is evidence from survey data, for example 2 26.9 the World Values Survey, showing that most 3 24.8 people today tend to value substantive equality of opportunity rather than equality of outcomes. (not/less important) 9.3 • Substantive equality of opportunity is a stronger Source: World Values Survey, 2008. concept than formal equality of opportunity, which focuses on non-discrimination in social and institutional processes. • Governments and international organizations have progressively embraced the principle of substantive equality of opportunity. The World Bank, for instance, has developed and started using a Human Opportunity Index as one of the relevant indicators to assess social, human and economic development aspects in Latin America, and is currently expanding its use to other regions, for example the Middle East and North Africa.

25 2.5 The relationship between that the optimum will never be reached because the problems of incomplete or asymmetric information (that efficiency and equity are the primarily responsible for the crucial failures of capital and insurance markets), externalities, public 2.5.1 The standard viewpoint goods and limited rationality will never disappear. Indeed, A standard view in economics is that there exists a economists have studied in depth the deviations from the trade-off between efficiency and equity. The part of first best scenario that occur in settings where markets the standard neoclassical economics that is known as are incomplete or where economic relations occur welfare economics looks initially at efficiency and is under asymmetric information. When the more realistic not concerned with equity. Its main result states that assumption of incomplete or imperfect markets is made, under the condition of market perfection and individual the negative conclusion about the role of governments rationality, any market equilibrium produces an efficient and redistribution policy changes dramatically. It might allocation (or distribution) of resources. Also, very unequal even become possible that redistribution is an effective distributions are seen as efficient if they are obtained strategy to counter market failures and promote efficiency. as a market equilibrium. In this context the neoclassical economist cannot prefer one efficient outcome over 2.5.2 The standard viewpoint: another, because of the Pareto criterion: moving from when is it less valid? an efficient outcome to another implies that at least one In the context of imperfect markets, the unambiguous individual will be worse off. From society’s standpoint, result that redistribution is certainly costly does not hold. the choice within the set of Pareto efficient outcomes is A redistributive policy might produce efficiency gains ultimately a political decision. Depending on the political and efficiency losses that ought to be carefully and institutions, there exists a way to aggregate individual pragmatically evaluated. Whenever the former exceeds preferences (voting in democratic countries) and decide the latter, redistribution should be carried on. This does not what distribution of resources corresponds to the criterion mean that redistribution is inexpensive under imperfect of justice the society has adopted. When this target markets but only that the efficiency gains attainable by distribution has been defined, then the neoclassical means of income redistribution more than offset the economist can propose strategies to converge towards the efficiency costs of redistribution. Whether to undertake benchmark. Unfortunately, any government intervention redistribution or not depends on the kind and relevance aimed at redistributing resources (except for lump sum of market imperfection, so that any judgement should be taxes) in a perfect market economy produces inefficiencies, made on a case-by-case basis. This is not the end of the because it distorts individual choices, which are deemed to story though. If after careful evaluation redistribution is be completely rational. In this context, with all assumptions found to cause an efficiency loss, the case for redistribution holding, redistribution is costly and produces efficiency might still be made. If the society is ready to sacrifice losses. This is the source of the discussion of a trade- some efficiency to achieve a more equitable distribution off between efficiency and equality that characterizes of resources, this would be an entirely defendable traditional neoclassical economics. strategy from an economic perspective. The only concern The trade-off between efficiency and equality certainly of neoclassical economists will be how to achieve this exists under the conditions of rationality and market result of a more equitable distribution of resources at perfection. However, the ideal setting of perfect the minimum cost. markets should not be considered as the ultimate Summing up, the idea of the trade-off between equality description of how the economic system actually does and efficiency is likely to have been overemphasized. In or can work. Rather it has to be considered as a useful reality, neoclassical economics indicates that redistribution reference that can be taken to measure how distant does have a price but that sometimes this price is the actual situation is from its optimum, its so-called worth paying and sometimes not. If there is a political “first best”. Neoclassical economists are well aware decision to pay the price, neoclassical economists will

26 Chapter 2. The economic argument for social determinants of health and socially determined health inequalities

(understandably) want to find the least costly strategy connections in the developing world. This conclusion has to reach that goal. The income distribution obtained been later confirmed by further evidence across countries through the workings of the market might not be the in different development stages, suggesting that equality one that maximizes social welfare. In other words, the appears to be an important ingredient in promoting and social preference for equity prevailing in society might sustaining growth (33, 34). be different to the one produced by the market. A number of studies have demonstrated that an economy’s growth path can depend on parameters of the initial 2.5.3 The macroeconomics viewpoint: distribution of income (see Ravallion (35) for a review of traditional and new evidence the recent literature). The parameter that has received At the macroeconomic level, the traditional, neoclassical most attention is income inequality. When income is economic view emphasized the potential beneficial effects distributed unequally, the poor have little collateral and of income inequality on savings, investment and incentives are thus excluded from the credit markets. This implies (29). Based on this, theorists and practitioners have that potentially profitable and growth-enhancing business consistently argued that some level of income inequality ventures or investment in physical and human capital was necessary and desirable for economic efficiency’s are left untapped (36–38). Alternatively, inequality might sake, and thus that a certain trade-off between economic prompt distortionary policy responses (39), or efficiency- growth and inequality was to be accepted. Forbes (30) in enhancing reforms can be blocked. this sense found that an increase in inequality tended to Two other indicators of how income is distributed are the raise growth during the subsequent period. Banerjee and size of the middle class and the poverty rate. Easterly Duflo (31) concluded in turn that changes in inequality (40) finds evidence that a larger income share controlled in either direction led to lower growth in the subsequent by the middle three quintiles promotes economic growth five-year period. They interpreted this finding as supportive because a strong middle class fosters entrepreneurship, of the notion that redistribution hurts growth, at least shifts the composition of consumer demand towards mass over short- to medium-term horizons. products promoting domestic industrial development, or In the past two decades, however, a growing body makes it more politically feasible to attain policy reforms of research has identified new channels between and institutional changes conducive to growth. Ravallion inequality or equity and growth. This new evidence (35) shows that higher current poverty incidence yields suggests that income inequality can have disruptive lower growth when the poor are subject to a borrowing effects on resource allocation that can be damaging for constraint. Poverty might reduce growth because it economic growth. Recent studies have found that when leads the poor to adopt very costly survival strategies growth is looked at over the long term, the trade-off that prevent them from improving their condition by means of profitable investment opportunities and trap between efficiency and equality may not exist (32). The them into poverty. groundbreaking World Development Report 2006, on equity and development, makes in this sense a strong This evidence suggests that under imperfect markets argument in favour of interventions targeting inequities (especially imperfect credit markets) income distribution (14). In summary, the report concludes that by ensuring is a determinant of economic growth and there is a case that outcomes are determined by talents and efforts for government redistribution. Note that this intervention rather than predetermined circumstances, convergence of is however motivated by efficiency reasons (promote the goals of equity and efficiency can be achieved. First, growth) rather than by a concern for equality per se. with imperfect markets, inequalities in power and wealth Recently Sala-i-Martin and Pinkovskiy (41) have shown translate into unequal opportunities, leading to wasted that in Africa (supposed to be the continent lagging most productive potential and to an inefficient allocation of as regards the process of poverty reduction, especially resources. Second, economic and political inequalities if compared with Asia and Latin America), since the mid are associated with impaired institutional development. 1990s economic growth and poverty reduction went hand The report provided various pieces of evidence on these in hand in all countries except those at war.

27 More recently, a consensus seems to have emerged Despite the growing amount of work that suggests a around the argument that growing income inequalities positive association between income equality or equity within countries over recent decades may have played and economic development, the immediate role for policy a role in the current financial and economic crisis. Many is yet not clear. More inequality may shorten the duration theorists and practitioners from different disciplines have of growth and induce crisis, but poorly designed efforts to warned that widening income gaps between the minority reduce inequality could be counterproductive, distorting 1–5% population at the top of the income distribution and incentives and undermining growth. In this sense, the the rest across countries is one of the driving factors of reforms that prompted growth in China involved giving the crisis (42–46). According to different analyses, the stronger incentives to farmers. Although this probably increased demand for consumer borrowing to finance led to an increase in inequalities among farmers, it also desired consumption to keep up with those whose earnings resulted in an increase of the income of the poor and reduced overall inequality as it gave a tremendous spur were rising faster was the main originating factor (46–49). Others conclude that the impact on aggregate demand of to growth (53). The studies being currently carried out on the role that economic inequality or inequities have played the redistribution from households with high propensity in the recent crisis will provide further insights on these to consume to households with a lower propensity to issues. If they confirm that growing inequality was one consume was a determinant (46, 48). of the originating factors, this would doubtless become a Although rigorous research is still lacking, evidence on major additional argument for public interventions aimed the role played by growing inequalities in the generation at reducing inequity. of the crisis is increasing. A recent OECD report (50) Regardless of the economic implications of this debate, it points to growing income inequalities as a potential must be noted that some policy interventions can evidently factor driving the current crisis. The study confirms that address both equity and efficiency concerns at the same over the two decades prior to the onset of the global time. As highlighted by Weimer and Vining (54), there economic crisis the household incomes of the richest are efficient policies that can lead to equitable outcomes, 10% grew faster than those of the poorest 10% across and interventions based on equity arguments that lead to countries. The Gini coefficient stood at an average of increased efficiency. This effect is known as the “double 0.29 in OECD countries in the mid-1980s. By the late dividend”. Sometimes targeting disadvantaged groups 2000s, however, it had increased by almost 10% to 0.316. in general may carry with it higher levels of efficiency The increases in household income inequality have been because of larger marginal effects of interventions on the largely driven by changes in the distribution of wages disadvantaged rather than the overall population. This can and salaries. With very few exceptions the wages of be the case with for instance drug treatment programmes. the 10% best-paid workers have risen relative to those Along the same line, and as argued by Heckman and of the 10% lowest paid. In this sense, another recent Masterov, “investing in disadvantaged young children is International Labour Organization (ILO) report highlights a rare public policy with no equity–efficiency trade-off. that the income gap between the top and bottom 10% It reduces the inequality associated with the accident of wage earners increased by 70% in the countries for of birth and at the same time raises the productivity of which data exist, and the share of wages over the total society at large” (55). In this sense Heckman and Masterov income declined over the last two decades. Similar trends make the case by reviewing substantial evidence that were observed for other dimensions of income inequality, these children are more likely to commit crime, have including labour income vis-à-vis profits, or top wages out-of-wedlock births and drop out of school (56). vis-à-vis low-paid workers’ wages (51). On the other The “double dividend” effect has additionally been hand, Atkinson and Morelli (52) argue in their assessment discussed in the literature evaluating the impact of of the relationship between inequality and the banking certain interventions aimed at improving gender equality crisis that a clear linkage cannot be identified in history in the labour market or environmental policies. It has across OECD countries. been found that affirmative interventions establishing

28 Chapter 2. The economic argument for social determinants of health and socially determined health inequalities

quotas for women in competition situations can have a positive effect on the willingness of women to expose Key messages: equity and efficiency trade- themselves to a competitive situation while bearing no offs and win-wins negative effects on the efficiency of selecting the best • A standard view in economics is that there candidates (57, 58). Although the conclusions in the exists a trade-off between efficiency and equity. literature are mixed in this regard, double dividends The part of the standard neoclassical economics are also often associated with environmental policies that is known as welfare economics looks initially combined with other interventions that in turn promote at efficiency and is not concerned with equity. new economic growth and employment (59). In this Its main result states that under the condition sense, the ILO World of Work Report 2009 shows that if of market perfection and individual rationality, a price was imposed on carbon dioxide emissions, and any market equilibrium produces an efficient if the resulting revenues were used to cut labour taxes, allocation (or distribution) of resources. then employment would rise by 0.5% by 2014. This is • In the context of imperfect markets, the equivalent to over 14.3 million net new jobs for the world unambiguous result that redistribution is certainly economy as a whole (60). Other studies have found that costly does not hold. environmental taxes can produce significant efficiency gains by reducing the costs of the tax system, besides the • At the macroeconomic level, the traditional, neoclassical economic view emphasized the environmental (and health) benefits associated with them potential beneficial effects of income inequality ( ). In addition, country-specific studies have confirmed 61 on savings, investment and incentives. the multiple potential benefits of environmental policies. Van Heerden et al. (62) found a triple dividend (decreasing • New evidence suggests that income inequality emissions, increasing gross domestic product (GDP) and can have disruptive effects on resource allocation decreasing poverty) for South Africa if environmental taxes that can be damaging for economic growth. Over are recycled through a reduction in food taxes. the long term, the trade-off between efficiency and equality may not exist. The conclusion that can be derived from the available • This evidence suggests that where markets are evidence is that a direct government investment in social imperfect, income distribution is a determinant determinants of health, undertaken on equity grounds, may of economic growth and there is a case for not necessarily produce efficiency losses. The underlying government redistribution. This intervention trade-off between efficiency and equality predicted by the is however motivated by efficiency reasons standard textbooks of economics is unlikely to dominate (promote growth) rather than by a concern for the efficiency benefits that the government intervention equality per se. could achieve in a context of imperfect markets, where redistribution policies are able to prevent situations of • More recently, a consensus seems to have emerged around the argument that growing market failure. income inequalities within countries over recent decades may have played a role in the recent financial and economic crisis. • Regardless of the economic implications of this debate, it must be noted that some policy interventions can evidently address both equity and efficiency concerns at the same time. There are efficient policies that can lead to equitable outcomes, and policies or interventions based on equity arguments that lead to increased efficiency. This effect is known as the “double dividend”.

29 19. Human Development Report 2010. The real wealth of nations: References pathways to human development. United Nations Development 1. Jack W. Principles of health economics for developing countries. Programme, 2010. Washington, DC, World Bank, 1999. 20. Alkire S, Foster J. Designing the Inequality-Adjusted Human 2. Thaler RH, Sunstein CH. Nudge: improving decisions about Development Index (IHDI). Human Development Research Paper health, wealth, and happiness. New Haven, CT, Yale University 2010/28. United Nations Development Programme, 2010. Press, 2008. 21. Corak M. Do poor children become poor adults? Lessons from 3. Sloan FA et al. The price of smoking. Cambridge, MA, MIT Press, a cross-country comparison of generational earnings mobility. 2004. Research on Economic Inequalities, 2006, 13(1):143–188. 4. Musgrave RA. Provision for social goods. In: Margolis J, Guitton 22. Tomes N. The family, inheritance, and the intergenerational H, eds. Public Economics. London, McMillan, 1959. transmission of inequality. Journal of Political Economy, 1981, 89:928–958. 5. Pearce D, Nash C. The social appraisal of projects. a text of cost-benefit analysis. London, Macmilan, 1981. 23. Shea JS. Does parents’ money matter? Journal of Public Economics, 2000, 77:155–184. 6. Preventing tobacco use among young people: a report of the Surgeon General. Atlanta, United States Department of Health 24. Fehr E, Fischbacher U. The nature of human altruism. Nature, and Human Services, 1994. 2003, 425:785–791. 7. Case A et al. The lasting impact of childhood health and 25. Cameron LA. Raising the stakes in the Ultimatum Game: circumstance. Journal of Health Economics, 2005, 24(2):365–369. experimental evidence from Indonesia. Economic Inquiry, 1999, 37(1):47–59. 8. van Dam RM et al. Coffee, caffeine, and risk of type 2 diabetes: a prospective cohort study in younger and middle-aged U.S. 26. Henrich J et al. Foundations of human sociality: economic women. Diabetes Care, 2006, 29(2):398–403. experiments and ethnographic evidence from fifteen small-scale societies. Oxford University Press, 2004. 9. Whitaker RC et al. Predicting obesity in young adulthood from childhood and parental obesity. New England Journal of Medicine, 27. Alesina A et al. Inequality and happiness: are Europeans 1997, 337(13):869­–873. and Americans different? Journal of Public Economics, 2004, 88(9–10):2009–2042. 10. O’Donoghue T, Rabin M. 2003. Studying optimal paternalism, illustrated by a model of sin taxes. American Economic Review, 28. Osberg L, Smeeding T. “Fair” inequality? An international 2003, 93(2):186–191. comparison of attitudes to pay differentials. Dalhousie University, 2004. 11. Simon H. Models of man: social and rational – mathematical essays on rational human behavior in society setting. University 29. Kaldor N. A model of economic growth. Economic Journal, 1957, of California, 1957. 67(268):591–624. 12. Fang HM, Silverman D. Time-inconsistency and welfare program 30. Forbes KJ. A reassessment of the relationship between inequality participation: evidence from the NLSY. International Economic and growth. American Economic Review, 2000, 90(4):869–887. Review, 2009, 50(4):1043–1077. 31. Banerjee A, Duflo E. Inequality and growth: what can the data 13. Z hang L. Saving and retirement behavior under quasi-hyperbolic say? Journal of Economic Growth, 2003, 8(3):267–299. discounting. Journal of Economics, 2012, DOI-10.1007/s00712- 32. Barro RJ. Inequality and growth in a panel of countries. Journal 012-0302-8. of Economic Growth, 2000, 5(1):5–32. 14. World Development Report 2006: equity and development. 33. Berg A, Ostry JD. Inequality and unsustainable growth: two sides Washington, DC, World Bank, 2006. of the same coin? IMF Staff Discussion Note 11/08. International 15. Rawls J. A theory of justice. Belknap Press of Harvard University Monetary Fund, 2011. Press, 1971. 34. Berg A et al. What makes growth sustained? Journal of 16. Roemer JE. Equality of opportunity. Cambridge, MA, Harvard Development Economics, 2012, 98(2):149–166. University Press, 1998. 35. Ravallion M. Fighting poverty one experiment at a time: a review 17. Bourguignon F et al. Inequality of opportunity in Brazil. Review of Abhijit Banerjee and Esther Duflo’s Poor economics: a radical of Income and Wealth, 2007, 253(4):585–618. rethinking of the way to fight global poverty. Journal of Economic Literature, 2012, 50(1):103–14. 18. Paes de Barros R et al. Measuring inequality of opporutnities in Latin America and the Caribbean. Washington, DC, World Bank, 36. Aghion P, Bolton P. A theory of trickle-down growth and 2009. development. Review of Economic Studies, 1997, 64(2):151–172.

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37. Bénabou R. Inequality and growth. NBER Macroeconomics, 1996, 57. Balafoutas L, Sutter M. Gender, competition and the efficiency 11:11–92. of policy interventions. IZA Discussion Paper No. 4955. 2010. 38. Galor O, Zeira J. Income distribution and macroeconomics. 58. Calsamiglia C et al. The incentive effects of affirmative action in Review of Economic Studies, 1993, 60(1):35–52. a real-effort tournament. University Autonoma Barcelona Working Paper. 2010. 39. Alesina A, Rodrik D. Income distribution, political instability and investment. Discussion Paper Series No. 751. 1994. 59. Capros P et al. Double dividend analysis: first results of a general equilibrium model (GEM-E3) linking the EU-12 countries. In: 40. Easterly W. The middle class consensus and economic development. Carraro C, Siniscalo D, eds. Environmental fiscal reform and Journal of Economic Growth, 2001, (4):317–335. unemployment. 1996. 41. Sala-i-Martin X, Pinkovskiy M. African poverty is falling ... much 60. World of Work Report 2009. Geneva, International Labour faster than you think! NBER Working Paper No. 15775. National Organization, 2009. Bureau of Economic Research, 2010. 61. Parry I, Bento A. Tax deductions, environmental policy, and the 42. Acemoglu D, Robinson J. Why nations fail: the origins of power, “double dividend” hypothesis. World Bank Policy Research Working prosperity, and poverty. Crown Business, 2012. Paper Series No. 2119. Washington, DC, World Bank, 1999. 43. Hacker J, Pierson P. Winner-take-all politics: how Washington 62. van Heerden JH et al. Searching for triple dividends in South made the rich richer –and turned its back on the middle class. Africa: fighting CO pollution and poverty while promoting growth. Simon & Schuster, 2010. 2 Energy Journal, 2006, 27(2):113–142. 44. Judt T. Ill fares the land. Penguin Press, 2010. 45. Rajan RG. Fault lines: how hidden fractures still threaten the world economy. Princeton University Press, 2010. 46. Stiglitz EJ. The price of inequality: how today’s divided society endangers our future. New York, W.W. Norton & Company, 2010. 47. Duesenberry J. Income, savings and the theory of consumer behavior. Cambridge, MA, Harvard University Press, 1949. 48. Fitoussi J-P, Saraceno F. Inequality and macroeconomic performance. OFCE/POLHIA 13. 2010. 49. Frank RH et al. Expenditure cascades. SSRN Working Paper. 2010. 50. Divided we stand: why inequality keeps rising. OECD Report. Organisation for Economic Co-operation and Development, 2011. 51. Income inequality as a cause of the great recession? A survey of current debates. Conditions of Work and Employment Series No. 9. International Labour Organization, 2012. 52. Atkinson AB, Morrelli S. Economic crises and inequality. Human Development Research Paper No. 05. 2011. 53. Chaudhuri S, Ravallion M. Partially awakened giants: uneven growth in China and India. In: Winters LA, Shahib Y, eds. Dancing with giants: China, India and the global economy. Washington, DC, World Bank, 2007. 54. Weimer DL, Vining AR. Investing in the disadvantaged: assessing the benefits and costs of social policies. Georgetown University Press, 2009. 55. Heckman JJ, Masterov DV. The productivity argument for investing in young children. Review of Agricultural Economics, 2007, 29(3):446–493. 56. Epstein D et al. Social determinants of health: an economic perspective. Health Economics, 2009, 18:495–502.

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Chapter 3. Assessing value for money of interventions

he presence of an economic justification for 3.1.1 Valuing costs government to “do something” does not complete Tthe economic argument. What is needed in addition Assessing value for money of social determinants of is the evidence that if only something is done, then the health interventions first of all requires measuring the “benefits” (appropriately defined) at least outweigh the costs of the intervention under consideration. The concept “costs” (also appropriately defined) of the intervention. of costs in economic evaluation is based on the same This chapter discusses precisely those two key steps fundamental principle as the concept of benefits: social involved in undertaking a “value for money” assessment: determinants of health interventions create costs because how do we arrive at cost and benefit estimates of social they make some individuals in society unhappier. The link determinants of health interventions? As will become between those interventions and unhappiness, in turn, is clear, in particular the assessment of the benefits poses the concept of opportunity cost. When resources are used important challenges that researchers and policy-makers in an intervention, they cannot be used in the production need to be aware of when using and requesting such of other goods and services. Individuals who have had to evidence. give up the opportunity to consume these other desirable goods and services are less happy. Under conditions that often hold, the market prices of the resources 3.1 Valuing the consequences used in a social determinants of health intervention will of social determinants of be a good measure of the opportunity costs. Standard health interventions references such as Boardman et al. (3) contain in-depth discussions of the challenges of measuring opportunity Applied welfare economics provides a strong conceptual costs. Many of the challenges in measuring the costs of foundation for economic evaluations of social determinants social determinants of health interventions are similar. of health interventions. The common-sense idea is that such interventions yield benefits because they improve In a recent review, Weatherly et al. (4) suggest that individuals’ well-being. In economic terminology, these measuring intersectoral costs poses special methodological interventions increase individuals’ utility, and social challenges for economic evaluation of public health welfare is some aggregation of the utility levels of all interventions. These costs pose the same challenges for economic evaluations of social determinants of health individuals in a society (1, 2).7 In cost–utility analysis, a form of cost–effectiveness analysis, health benefits are interventions. The challenges stem from the fact that such measured based on individual preferences for different interventions often have wide-ranging impacts, so their health states, summarized in measures such as the costs may fall on individuals as well as on various parts quality-adjusted life year (QALY). In social cost–benefit of the public sector. Moreover, there may be ripple effects analysis, social benefits are measured based on individuals’ across different sectors. Weatherly et al. (p. 87) use an willingness to pay for the desired outcome. Both methods example that could be considered a social determinants try to value health consequences: cost–effectiveness of health intervention: “improvements in housing could analysis uses a health metric while cost–benefit analysis reduce illness and injuries, with consequent reductions in uses a monetary one. health-care utilization.” The goal of a complete economic evaluation is to value all of the changes in resource use caused by the intervention. A complete evaluation would take into account whether a housing improvement reduces (or increases) health care sector costs, while taking care to avoid double-counting costs or benefits.

7 This framing of the problem adopts the welfarism approach, as distinct from the extra-welfarism approach, to welfare economics. Brouwer et al. (1) argue that one of the key distinctions is that welfarism focuses on individual utility outcomes; in contrast, extra-welfarism permits the use of other outcomes, such as Sen’s (2) emphasis on individual capabilities. Brouwer et al. offer additional discussion.

33 an evaluation of the protocol of guaiac tests for colon Cost–utility analysis measures benefits in health cancer estimates the costs per cancer detected. units or utility associated with preferences for Cost–utility analysis is a form of cost–effectiveness analysis particular health states. where the effect or outcome of health interventions are Cost–benefit analysis measures benefits in terms measured in a common metric based on people’s utility of the willingness to pay for a particular outcome. levels or preferences over different health states. Probably Cost–effectiveness analysis relates the cost of the most popular common unit of measurement is the an intervention to a common effect, measured in QALY, but there are other variants, including the healthy natural units, such as life years. year equivalent (HYE) and the disability-adjusted life year (DALY). Using a common metric allows comparisons of a wide range of interventions. Cost savings estimates have rhetorical appeal in discussions of many public policies, including social Cost–utility analysis is a very well-established method for determinants of health interventions. The cost savings the economic evaluation of health care interventions. It approach focuses on the impact of the intervention on relies on stated-preference methods to elicit preferences either costs in the health care sector or on public sector over different health states. For example, in the standard budgets. Cost savings are a component of the benefits gamble method, respondents are asked about their of a social determinants of health intervention. However, preferences between a gamble that might result in there are no conceptual grounds for focusing solely on perfect health or death versus resulting with certainty this component and neglecting the other ways an in a suboptimal health state (such as a chronic illness). intervention may improve social welfare. Indeed, a narrow This and other methods are described in various standard focus on the health care sector or public sector budgets references, including Gold et al. and Drummond et al. can be quite misleading about the societal desirability (5, 6). Because of the popularity of cost–utility analysis, of social determinants of health interventions. Various there are now many estimates of QALY weights that social determinants of health interventions that increase measure preferences over a wide range of health states. longevity might lead to higher lifetime health care costs, which in some countries will also mean higher public From the perspective of this review, an important weakness sector costs. For example, precisely because of the heavy is that cost–effectiveness analysis and cost–utility analysis burden of diseases related to tobacco use, tobacco are hard to apply to the multiple impacts of social control efforts could actually increase future health care determinants of health interventions (7).8 For example, costs. Clearly, social determinants of health interventions a cost–effectiveness analysis or cost–utility analysis should not be judged failures because they are so of the health effects of an early childhood intervention successful in improving longevity that they increase would have to somehow incorporate its additional value lifetime health care costs. Instead, a complete economic of reductions in delinquency and crime. Some research evaluation (either cost–effectiveness or cost–benefit is moving the QALY approach in this direction. Dolan analysis) must be conducted to systematically compare et al. (8) extend the QALY approach to incorporate the all the costs and all the benefits of the intervention. intangible victim costs of violent crime, estimating that a murder results in about 18 QALYs lost, while a serious 3.1.2 Cost–effectiveness and wounding results in 0.19 QALYs lost. Dolan and Peasgood cost–utility analysis (9) further extend the approach to incorporate the costs Cost–effectiveness analysis and cost–utility analysis of the fear of crime among potential victims. are widely used and accepted for economic evaluations 8 of health interventions. Cost–effectiveness analysis French et al. (7, p. 273) make a similar point about economic evaluations in addiction research, noting that “the variety and complexity of relates the costs of an intervention to a simple, common outcomes in addiction research … make it difficult to express economic effect, often measured in natural units. For example, impact through only one outcome, such as quality-adjusted life years (QALYs) gained”.

34 Chapter 3. Assessing value for money of interventions

Alternatively, the Institute of Medicine (10) in the United to estimate willingness to pay to reduce the risks of States proposes a method to apply cost–utility analysis on-the-job injuries (11).9 to the analysis of regulations that yield both health Instead of studying revealed preferences for health in and non-health impacts. This method calculates the labour and other markets, an alternative approach to comprehensive cost–utility analysis ratio as the cost net estimate willingness to pay for health is to use stated of health care cost savings and other benefits per QALY preferences. Stated-preference methods use contingent saved. To net out the other benefits, this method requires valuation surveys that directly elicit willingness to pay for willingness to pay estimates for all the intervention’s non- non-market outcomes, including health. The methodology health impacts. Put differently, this method requires a of contingent valuation surveys has been extensively cost–benefit analysis for all non-health impacts, which is studied and refined. Much of the research on the then integrated into the QALY-based cost–utility analysis. contingent valuation method concerns the application of the method to value environmental quality. In an important 3.1.3 Cost–benefit analysis legitimization of the method, a “blue ribbon” panel of Cost–benefit analysis is based on societal willingness to social scientists convened by the United States National pay for the health improvements and other consequences Oceanic and Atmospheric Administration concluded that of social determinants of health interventions. Like the contingent valuation method could provide useful cost–effectiveness analysis, cost–benefit analysis relies estimates for the assessment of damages to natural on well-developed methods for estimating willingness resources (12). Standard references such as Boardman to pay for health, especially mortality risks. One general et al. (3, chapter 14) provide in-depth discussions of approach is to use methods based on revealed preferences. the contingent valuation method and its strengths and Revealed-preference methods analyse market behaviour weaknesses. to infer willingness to pay for non-market outcomes. An important advantage of cost–benefit analysis over For example, analysis of workers’ choices about job cost–utility analysis is that it is in principle straightforward safety and wages provide the basis for estimating the to apply to the multiple impacts of social determinants marginal value of mortality risks, often summarized as of health interventions (13, 14).10 The potential impacts the “value of a statistical life”. More precisely, these of those interventions on social welfare include studies estimate the dollar value people place on a small improvements in life expectancy, health-related quality reduction in the risk of death. An example is useful to of life, cognitive development, behaviour and social explain the terminology. Suppose a social determinants competence, educational attainment and earnings, and of health intervention in the housing sector improves reductions in delinquency and crime. Economic methods safety and reduces the risk of accidental death, say by 1 in 10 000. If each of 10 000 people are willing to pay $600 for that risk reduction, on aggregate the net benefits of the risk reduction are valued at $6 million. 9 The extensive research on the statistical value of life is reviewed Because the intervention can be expected (in a statistical and summarized in Viscusi and Aldy (11). They review more than 60 sense) to save one life, this product is then called the studies that provide estimates of willingness to pay to reduce mortality risks and about 40 studies that provide estimates of willingness to statistical value of life. The same approach is also used pay to reduce the risks of injuries. Estimates of willingness to pay to reduce mortality risks are available for at least 10 countries. These estimates are directly relevant to the health benefits from various social determinants of health interventions. 10 Homer et al. (13, p. 536) reach a similar conclusion about economic evaluation methods in addiction research. They argue that cost–benefit analysis is best suited to capture the societal benefits of substance abuse treatment, such as reduced criminal activity. Zavala et al. (14) provide a detailed discussion of cost–benefit analysis of adolescent substance abuse treatments, including illustrative estimates of the dollar value attached to outcomes related to education and employment, criminal activity and juvenile justice services.

35 have been developed to estimate willingness to pay for a contingent valuation survey.11 For example, surveys many of these outcomes. could elicit willingness to pay for an early childhood intervention programme of a specified size. The method of Cost–benefit analyses of social determinants of health conjoint analysis could enhance the survey’s usefulness. interventions can be conducted using either a bottom- By presenting respondents with different scenarios, a up or top-down approach to valuation. In the bottom-up conjoint analysis could provide estimates of willingness to approach, a dollar (or other currency) value is placed pay for a range of programme sizes and other programme on each impact of the intervention, based on estimated attributes. The obvious advantage of the top-down willingness to pay for each outcome. The total benefits of approach is that it eliminates the need to piece together an intervention equal the total willingness to pay for all of the values of all of the various intervention impacts. the impacts. For example, in a bottom-up approach to place a monetary value on saving a high-risk youth, Cohen and It is also possible to take an intermediate position between Piquero (15) use estimates of three components of crime bottom-up and top-down approaches. This approach costs: victim costs, criminal justice system costs and the could focus on proximate outcomes common to a variety lost productivity of incarcerated offenders. The values of of different social determinants of health interventions, these components are then added up to place a value on such as improvements in children’s cognitive and preventing various criminal offences. These researchers non-cognitive abilities. Estimates of willingness to pay then use these estimates to calculate the present value of for improved child abilities could be useful to estimate the costs imposed by a career criminal, which forms the the benefits of a range of social determinants of health basis for their estimate of the value of saving a high-risk interventions, including early childhood education but youth. To continue the bottom-up approach, the value of also housing and environmental interventions. saving a high-risk youth might be one component of the In closing this section, two notes of caution are in order benefits of a social determinants of health intervention, to avoid oversimplification of the recommendations. such as early childhood education. The value of preventing First, while willingness to pay does represent, in principle, career criminals would then be combined with the value a promising approach to valuing the benefits to be had of the participants’ higher earnings, improved health and from social determinants of health interventions, the other outcomes. limitations and problems of the approach must also be The top-down approach to valuation uses estimates recognized. As revealed by considerable evidence from the of willingness to pay for an impact at a higher level psychology and behavioural economics literature, existing of aggregation. For example, Cohen and Piquero (15) willingness to pay estimates can suffer from significant compare the bottom-up estimates of the value of the bias and uncertainty, especially for unfamiliar goods components of the costs of crime with top-down estimates involving small probabilities. Examples are provided in of willingness to pay to prevent crime. To compare the critical reviews by Smith and Sach (16, 17). Second, while results, in their bottom-up approach they estimate that the societal perspective is the most relevant economic each murder results in $4.6 million of victim costs, evaluation perspective to adopt in the case of multisectoral $300 000 in criminal justice system costs and $140 000 social determinants of health interventions, there may be in offender productivity losses, for a total of over $5 million. good reasons to adopt a sector-specific perspective in They then total these sums in the top-down approach to addition to the social one. This could apply in the case of derive an estimate that the willingness to pay to prevent 11 In principle, it might be possible to use the revealed-preference approach a murder is $11.8 million. and infer willingness to pay for some social determinants of health interventions based on market behaviours. For example, the value In principle, a cost–benefit analysis of a social determinants of early childhood education programmes in a school system might of health intervention could use the top-down approach be reflected in higher housing values. In this example, the challenge based on direct estimates of willingness to pay for the is to disentangle the value homeowners place on the programme for their own children versus the value they place on the programme for intervention. Most applications of this approach would helping disadvantaged children in their community. This might be probably have to rely on stated preferences through possible by focusing on housing prices paid by childless homeowners.

36 Chapter 3. Assessing value for money of interventions

social determinants of health investment decisions that it less suitable in the context of social determinants of reside solely within the ministry of health. Alternatively, health interventions. in the (likely) event that a social determinants of health Cost–benefit analysis methods require the use of time intervention that has proved worthwhile from a societal discounting and methods to account for uncertainty (see, perspective would require contributions from different for example, Boardman et al. (3), chapters 6, 7, 8 and 10). sectors, an understanding of the costs and benefits that These are mainly standard issues that do not pose special are directly incurred by each sector separately would conceptual challenges for the economic evaluation of help determine which sectors may be most motivated social determinants of health interventions (which is not to play their part and which sectors might need to be to imply that the debate about, for example, the most compensated for their net losses. appropriate way of discounting costs and benefits in health economic evaluations in general has reached a 3.1.4 Conclusions consensus (see Claxton et al. (18) for a useful clarification and partial reconciliation of the various standpoints). The method of social cost–benefit analysis is the most Time discounting, however, is an important practical comprehensive approach to evaluate social determinants consideration. Many potential social determinants of of health interventions. Conditional on the nature of the health interventions, such as early childhood interventions, decision problem at hand, the social perspective may are investments that involve immediate costs that yield usefully be complemented by narrower sector-specific benefits only 10, 20 or more years in the future. In this ones. Although cost–effectiveness analysis has gained context, the choice of a discount rate is a very important widespread acceptance as a method to evaluate clinical determinant of whether the discounted present value interventions, its narrow focus on health effects makes of the benefits of the intervention outweighs its costs.

Key messages: valuing consequences of SDH interventions • Measuring intersectoral costs and social This approach could focus on proximate outcomes determinants of health interventions poses special common to a variety of different social determinants methodological challenges. Such interventions often of health interventions, such as improvements in have wide-ranging impacts, so their costs may fall children’s cognitive and non-cognitive abilities. on individuals as well as on various parts of the • A social determinants of health intervention that has public sector. Moreover, there may be ripple effects proved worthwhile from a societal perspective may across different sectors. require contributions from different sectors, and an • An important advantage of cost–benefit analysis understanding of the costs and benefits that are over cost–utility analysis is that it is in principle directly incurred by each sector separately would straightforward to apply to the multiple impacts of help determine which sectors may be most motivated social determinants of health interventions. to play their part and which sectors might need to • Revealed preferences for health in labour and other be compensated for their net losses. markets and stated preferences are two valuation • Time discounting is an important practical methods used to estimate willingness to pay for consideration in cost–benefit analyses. Many potential health. The methodology of contingent valuation social determinants of health interventions, such surveys has been extensively studied and refined as early childhood interventions, are investments and is endorsed by a “blue ribbon” panel of social that involve immediate costs that yield benefits only scientists convened by the United States National 10, 20 or more years in the future. In this context, Oceanic and Atmospheric Administration to value the choice of a discount rate is a very important protection of natural resources. determinant of whether the discounted present • It is also possible to take an intermediate position value of the benefits of the intervention outweighs between bottom-up and top-down approaches. its costs. 37 3.2 Valuing reductions in of people. These could be the socioeconomically deprived, the young, those who are severely ill or those having a very health inequities low life expectancy. For example, the “a QALY is a QALY” Both the theory and practice of economic evaluation tend assumption rules out the possibility that society might to shift the focus away from the value of reductions in prefer to deliver an improvement of 0.1 in the quality of health inequities. The theoretical foundations of economic life state to a patient who is severely ill over someone evaluation methods focus on efficiency: the total health who is in near perfect health. Any divergence away from gains or the total benefits from interventions, regardless the strict “a QALY is a QALY” assumption, in order to of how they are distributed across different members value more equitable outcomes, will be associated with of society. In practice, recent literature reviews have some loss in total health outcomes. This is an example confirmed that to date economic evaluation studies in of the equity–efficiency trade-off. health care and in public health have for the vast majority Although it neglects health inequities, it should be noted chosen not to take into account distributional effects (19). that the “a QALY is a QALY” assumption helps rule out At the same time, several empirical studies have shown decisions that lead to outcomes that directly contradict that people are willing to sacrifice overall health benefits fundamental ethical, legal and political principles. This is for a reduction in health inequalities (20). particularly true for clinical decisions, where the health economic evaluation literature is currently concentrated, The emphasis on efficiency over equity tends to neglect a but does not necessarily hold for public health interventions. central goal of social determinants of health interventions. It is hard to envisage any situation where it would be This section reviews approaches to incorporate the acceptable to actively deny a clinical intervention, such value of reductions in health inequities into economic as a cholesterol-lowering statin therapy, to a particular evaluations of social determinants of health interventions. group of patients based on their income or place of To set the stage, the section begins with a discussion residence. Yet this kind of discrimination, in the form of equity–efficiency trade-offs, before turning to more of targeting certain groups, is at least acceptable, and detailed discussions of the role of health inequities in may even be encouraged, in public health interventions. cost–effectiveness and cost–benefit analyses. Equity-weighting analysis has been proposed as an 3.2.1 V aluing reductions in health inequities extension of cost–effectiveness analysis that incorporates in cost–effectiveness analysis the value society places on reductions in health inequities (22). The basic idea of the approach is to reject the QALY-based cost–effectiveness analysis (also known as “a QALY is a QALY” assumption and explicitly place cost–utility analysis) is often justified as a tool to help greater weight on the QALY gains of certain groups. decision-makers maximize the health gains possible given In this approach, it would be possible to place a weight a constrained health sector budget. Any decision made on the QALY gains associated with competing public solely on the basis of maximizing health gains across health policies according to the effect that each has on an entire population is one that implicitly gives an equal health inequities. For example, a QALY gain that is also weight to one QALY gained regardless of who gains it associated with a reduction in health inequities would (21).12 This “a QALY is a QALY” assumption can only be be given more weight than a QALY gain that leaves valid for decision-making if society has no desire to give health inequities in place. Ultimately, alternative policies additional weight for QALYs that accrue to certain groups could then be ranked, rather neatly, not just in terms of their cost per QALY but also in terms of some cost per 12 This is the case regardless of how the QALY is achieved. Society may “equitable QALY” measurement. also have other concerns, in additional to equity considerations, such as a desire to protect the freedom to make choices. In the United While the need to address equity concerns in economic Kingdom, for example, a recent citizen’s council meeting indicated evaluation is widely shared, a number of unresolved that the public consider that “non-mandatory public health measures, such as providing education and information, were preferable to issues remain with the equity-weighting approach (23). mandatory ones, provided they were effective” (21, p. 26). Unlike monetary outcomes, equity outcomes could have

38 Chapter 3. Assessing value for money of interventions

a variety of conflicting meanings. It has been argued that poor. Alternatively, the basic needs approach retains the there are so many potential dimensions of equity that the assumption that “a dollar is a dollar”, but places higher use of equity weights would substantially complicate the dollar values on changes in the consumption of goods and analysis (24). It seems unlikely that it would be sufficient services that meet basic human needs, such as health to incorporate the equity weights at an aggregate level. care, food and shelter. Again, social determinants of More likely, weights would need to be applied separately health interventions are perfect examples of programmes for each individual targeted by a policy according to a that would be more highly valued using the basic needs range of equity-relevant characteristics. In any case approach to cost–benefit analysis. there is very little evidence of the approach having been Harberger expresses doubt that economics could achieve used in practice. One notable exception, which includes a consensus about the weight that should be attached to explicit time and age weights, is Murray and Lopez (25). the welfare of different groups (26). However, currently 3.2.2 V aluing reductions in health inequities existing methods used for valuing different health states, such as discrete choice experiments, could be used to in cost–benefit analysis elicit information from the public about their preferences In standard social cost–benefit analysis, the net benefits for various equity–efficiency trade-offs. For example, Cai of an intervention are calculated without regard to how the et al. (27) use a stated-preference survey to explore equity benefits and costs are distributed to different members trade-offs in choices over policies to prevent climate of society. As a result, even though they generate large change. They find that some respondents’ willingness benefits for disadvantaged populations, reductions in to pay is higher when they believe that the impacts health inequities will not necessarily lead to positive of climate change may be borne disproportionately net benefits in a cost–benefit analysis. As explained by by the world’s poor. Stated-preference surveys could Harberger, a pioneer of social cost–benefit analysis, the similarly elicit willingness to pay for the reductions in equal weighting of benefits and costs without regard to health inequities due to social determinants of health their distribution is fundamentally “a technical convention interventions. It would then be a straightforward exercise which permits us to separate resource allocation from to incorporate estimates of willingness to pay to reduce distributional effects in the analysis of any given problem” health inequities in cost–benefit analyses of social (26). Harberger further states (p. 3): determinants of health interventions. I emphatically do not mean to say or imply thereby that distributional considerations are unimportant, 3.2.3 Conclusions or that economists should refrain from expressing Table 3.1 presents a hierarchy of approaches to opinions concerning them. In fact, I believe that such incorporating equity considerations into economic opinions can play a vital role in the public debate over evaluations of social determinants of health interventions. many policy issues, especially on the wide range of The hierarchy is adapted from Cookson et al. (28). programmes with explicit distributional orientation. The first two approaches are recommended as relatively Social determinants of health interventions are perfect unproblematic. Neither attempts an explicit valuation examples of such programmes. of society’s willingness to pay for reductions in health inequalities, but, if published alongside the results of Several approaches, including the use of distributional standard cost–effectiveness analyses or cost–benefit weights and the basic needs approach, have been analyses, they could provide valuable supplementary proposed and implemented as ways to incorporate societal information for decision-makers concerned about the concerns about inequities. Analogous to equity weights in impact of competing health interventions on health cost–effectiveness analysis, the basic idea of distributional inequities. weights is to reject the “a dollar is a dollar” assumption made in standard cost–benefit analysis. The appropriate The first approach is the simple exercise of bringing choice of distributional weights could reflect a society’s together all existing information relating to how each willingness to redistribute income from the rich to the policy intervention under consideration might affect health

39 inequities. Ideally, this would include information about the necessary data relating to specific subgroups, so existing trends in health inequities, how those inequities this technique is likely to be costly in terms of requiring have been affected by similar interventions elsewhere additional data. and anything that is known about society’s willingness to pay to reduce those inequities. Clearly, this is only a first The choice of approach should be determined by a number step to incorporating equity considerations into economic of factors. Progression through the hierarchy relies on evaluation and may disclose little useful information. the availability of suitable information and data such However, in terms of best practice, it should be considered that in many cases it may only be possible to complete a minimum requirement. the simple review of background information. However, it is also important that a decision to invest resources The second approach, health equity impact assessment, in completing one of the more advanced approaches is an attempt to quantify the impact that competing interventions are likely to have on various health inequities. should be made only with consideration of how valuable This is likely to take the form of collecting data on how it is to the decision-maker to incorporate a particular the cost–effectiveness or net benefits of interventions equity consideration into the economic analysis. Or, will change if the intervention is targeted at different to put it another way, how sensitive is a decision that population subgroups. Standard evaluation methods would was made on the basis of QALY maximization (or net be suitable to achieve this. However, many evaluations of benefit maximization methods) to the inclusion of equity interventions tend to measure average effects and lack considerations?

Table 3.1 Potential approaches to incorporate equity considerations into economic evaluations of social determinants of health interventions Approaches Advantages Disadvantages Review of background information Requires no new methodology Provides only an insight to some on health inequities associated issues; does not provide Is cheap, easy and quick to complete conclusive answers to such questions Ensures that all existing relevant materials as, is the intervention cost–effective? are available to the decision-maker And does it reduce inequity? Is a useful first step Health inequity impact assessment Requires no new methodology in terms Requires data on the cost– of completing cost–effectiveness or cost– effectiveness or net benefits of an benefit analyses intervention by population subgroup; these data are not often collected Require no measurement of how much society values changes in health inequities Provides evidence on the cost of reducing health inequities Equity weighting of health Incorporates a quantifiable value for Costly in terms of time, data collection outcomes society’s willingness to pay for a reduction and computing power in health inequalities or Not yet used in practice Willingness to pay for health If completed at the individual level, would Suitable individual-level data are inequities probably provide a very accurate tool lacking

40 Chapter 3. Assessing value for money of interventions

3.3 Challenges in assessing data (35–39). Indeed, it can be argued that the use of such methods is the principal way forward when it the value for money of comes to assessing the impact of social determinants social determinants of of health interventions. This is why much of what follows health interventions elaborates on this point. Once effectiveness is reasonably well established, The use of economic arguments, in particular regarding economic evaluation methods can be applied to provide the “value for money” of suggested interventions, has systematic guidance to policy-makers about the costs been a low priority in recent major social determinants and consequences of alternative courses of action. of health initiatives, such as in CSDH (29–31).13 At the Frequently, economic evaluations are limited to sector- same time, the need to add an economic perspective to the analysis of social determinants of health and of specific domains. For example, the costs of a new medical health inequalities is increasingly recognized in the public treatment will be compared to the life years gained, or health community (32). the costs of worker training will be compared to the benefits of higher lifetime earnings. In contrast, economic Because any economic evaluation hinges on the evidence evaluations of social determinants of health interventions of the effectiveness of the entity being evaluated, a must consider their impacts across multiple domains. considerable share of this discussion focuses on the For example, investments in nutrition and early childhood challenge of assessing whether a given intervention “works” education have shown potential not only to improve (and if so, for whom). It is well known that compared health, but also to lead to cognitive and behavioural gains to clinical interventions, the evidence base for broader, and increased schooling (40). Economic evaluations of population-based public health interventions (possibly social determinants of health interventions must also including at least some social determinants of health recognize the value society places on reductions in health interventions) is much thinner (33, 34). The availability of inequities. Another criterion is for greater transparency abundant evidence on the inverse relationship between in evaluation methods. socioeconomic status and health can be seen as a useful target and benchmark for public policy, but it does not When evaluating alternative policy interventions, it is inform policy-makers of the best course of action. There important to use a research design that provides credible is currently a strong demand in public health research estimates of the causal impacts of the intervention to fill the evidence gap left by the comparative scarcity under consideration, even in the absence of randomized of randomized controlled experiments in public health experimental evidence. In this sense, Kenkel and Suhrcke and social determinants of health interventions. Several (41) offer a detailed catalogue of quasi-experimental, authors have called for turning to “quasi-experimental” econometric or structural models that can be used to evidence or “natural experiments”14 as one way to gain provide credible estimates of the effectiveness of social useful effectiveness evidence on the basis of observational determinants of health interventions.

13 There was some consideration of certain economic aspects in the • Randomized control trials. Randomized experiments recent England-specific strategic review of health inequalities in are considered the gold standard for estimating England post-2010, the Marmot Review (30), in that an attempt was effectiveness. However, a range of political, ethical made to estimate the expected economic benefits of reducing health and practical concerns has limited their use in the inequalities (31). evaluation of social determinants of health interventions. 14 Examples include Bonnefoy et al. (35), Jones (36), Academy of Medical Sciences (37) and Ramanathan et al. (38). In addition, calls for public Some examples include experimental evaluations health research funding appear to increasingly incorporate a focus of early childhood interventions, such as the Perry on quasi-experimental evidence (for example, the recent Phase IV of Preschool programme, and an experimental evaluation the National Prevention Research Initiative in the United Kingdom). of the Moving to Opportunity experiment that provided The United Kingdom’s Medical Research Council, after its widely cited complex intervention guidance (39), is preparing guidance on the housing vouchers to poor families in the United States. evaluation of public health interventions using natural experiments. A recent meta-analysis of evaluations of early childhood

41 interventions found 23 estimates of effectiveness theoretical model, which in turn is used to predict the based on randomized designs (40). responses to possible environmental changes (43). This method’s strength is wider generalizability, while Despite the challenges to implementing its weaknesses stem from its assumptions, complexity experimental designs in social determinants and lack of transparency, which make replication and of health interventions, it is important to bear in sensitivity analyses more difficult. mind that at least some of the concerns can be overcome. For instance, instead of completely In practice, evaluations of social determinants of health “depriving” one or more communities of the “treatment”, interventions will most often have to rely on quasi- all communities could receive the intervention, but experimental methods to estimate the causal impacts in a phased manner, thereby allowing analysis of the required to measure programme effectiveness, although variation in outcomes according to the intensity of the selection of the method will depend on the existing intervention over time (36). On the other hand, the research base and the practicality of new research on recognition of the randomized control trial as the gold the causal impacts of the intervention. standard should not ignore its limitations, arguably Certain recommendations can be made up front for the main one being the very restricted generalizability the choice of evaluation methodologies in the case (external validity) of the findings beyond the population of social determinants of health. In order to provide and circumstances encountered within the trial. a more complete guide to policy-makers evaluating • Quasi-experimental econometric methods. Quasi- potential future interventions, a combination of structural experimental methods often rely on constructed quasi- models and meta-analysis to generalize evidence on experiments to estimate causal impacts. One of the intervention effectiveness, together with estimates of main quasi-experimental methodologies is that based effectiveness and causal impacts in “natural units” as on difference-in-difference estimators, which relies on directly measured in the evaluation, will be desirable. variation across groups that is neither natural nor an The multiple sources of uncertainty that arise in estimates experiment, and compares the before and after results of the effectiveness of social determinants of health between the treated and untreated comparison groups. interventions (statistical uncertainty in experimental or Another quasi-experimental method is the regression quasi-experimental estimates of programme impacts, discontinuity approach, which relies on variation that additional uncertainty if estimates from multiple sources creates a discontinuity in assignment to an intervention, are combined, and uncertainty in predictions about so that individuals on each side of the discontinuity are long-term impacts) should be accounted for in any analysis. provided useful treatment versus control groups. The third quasi-experimental method is the instrumental Cost–effectiveness or cost–utility analysis, and variables approach, where a suitable variable (the cost–benefit analysis, are methods that allow valuing the instrument) provides an exogenous source of variation health consequences of interventions using a health and that allows identifying a causal relationship. These money metric respectively. The use of cost–benefit analysis methods present similar limitations to those of the seems to offer particular potential for the evaluation randomized control trial. The details and the context of social determinants of health interventions. In this of a new intervention being evaluated may differ from sense, and considering the special nature of the social the past quasi-experiment studied, and the estimates determinants of health and the potentially multisectoral may be of limited generalizability. implications of interventions that aim to address them, • Structural econometric methods. The structural Kenkel and Suhrcke (41) and others recommend the approach emphasizes clearly articulated economic use of social cost–benefit analysis as the approach models that can be used to evaluate the impact of public to develop a comprehensive measure that reflects the policies, forecast their effects in new environments, value of improving outcomes across multiple domains. and predict the effects of policies never tried. One of Cost–benefit analysis is based on societal willingness to the strengths of this method is that it takes into special pay for the health improvements and other consequences account the problem of external validity (42). Structural of social determinants of health interventions, both modelling matches observed past behaviour with a

42 Chapter 3. Assessing value for money of interventions

through revealed and stated preferences, and using either preferences to pay to help the most disadvantaged into a bottom-up (total benefits equal the total willingness standard willingness to pay measures, using for instance to pay for the addition of the value attributed to all contingent valuations surveys, increasingly used in health impacts) or top-down (total benefits equal the value policy (48). attributed to the intervention) approach to valuation. Equity-weighting analysis has been proposed as an When policy-makers face an equity–efficiency trade-off, extension of cost–effectiveness analysis that incorporates the results of cost–effectiveness analysis or cost–benefit the value society places on reductions in health inequities analysis can also provide guidance by quantifying the (22). The basic idea of the approach is to reject the efficiency losses incurred to improve equity. “a QALY is a QALY” assumption and explicitly place Cost–benefit analysis provides an increasingly used greater weight on the QALY gains of certain groups. and recognized tool for social policy evaluation (44). Other approaches, including the use of distributional As explained above, cost–benefit analysis aims at weights and the basic needs approach, have been identifying the resource allocation that can generate proposed and implemented as ways to incorporate societal the largest aggregate value, as assessed by summing concerns about inequities in cost–benefit analysis. However, individual valuations across all members of society. It does a universally accepted method to incorporate the value so by predicting net benefits based on the monetization of reducing health inequities into economic evaluations of predicted effects with shadow prices. However, and has yet to emerge. as Kenkel and Suhrcke ( ) and Weimer and Vining ( ) 41 44 The need to consider behaviours that are often relevant point out, despite the potential of this method there are to social policy and do not satisfy the assumptions of certain concerns that need to be considered and addressed neoclassical welfare economics, such as addictions, is through further research and analysis. an additional problematic area. As argued by Weimer The high levels of uncertainty affecting social policy and Vining (44), addiction-driven demand may not areas pose an additional challenge. Cost–benefit analysis provide utility gains in the same way as non-addicted involves the use of time discounting, which in the case of demand. Cost–benefit analysis needs to incorporate social determinants of health interventions that normally this factor; otherwise the costs of intervention that unfold their impacts over long periods of time becomes reduce the consumption may be overestimated. particularly important. The uncertainty of the predicted Although some authors (49) consider that when consumers effects and of shadow prices applied needs to be explicitly take full consideration of the future effects of their acknowledged by researchers using this methodology. current consumption, addictive behaviour is irrelevant (Monte Carlo simulation may be one way of capturing the in these terms (rational addiction), it is more likely that degree of uncertainty in cost–benefit analysis.) consumers are time inconsistent and myopic as to the future effects of current behaviour; and therefore, that Additionally, it is necessary to consider that social policy their demand schedule is not the standard one. Weimer is often desirable from an equity perspective, an aspect et al. ( ) employ contingent valuation to estimate that standard cost–benefit analysis does not capture. 50 smokers’ willingness to pay for removal of addiction in a There is no consensus among economists on how best to model that takes account of this in cost–benefit analysis. account for distributional effects in cost–benefit analysis Yet more studies to develop confident estimates of or cost–effectiveness analysis. One possible avenue non-addicted demand for goods with addictive properties is the incorporation of desirable distributional effects or which engender behavioural patterns with addictive through weighting (based on differentiated marginal utility properties are required. depending on income level). Researchers have proposed different proxies for relative marginal utilities based on tax rates (45, 46) or patterns of public expenditure (47). Yet this method has been generally regarded as a complement to rather than as a replacement for regular cost–benefit analysis. An alternative is to translate

43 Key messages: value for money References 1. Brouwer R et al. General equilibrium modelling of the direct • In addition to the evidence that something works, and indirect economic impacts of water quality improvements one needs to show that if only something is done, in the Netherlands at national and river basin scale. Ecological then the “benefits” (appropriately defined) at Economics, 2008, Special Issue, Integrated Hydro-Economic least outweigh the “costs” (also appropriately Modelling. defined) of the intervention. These are two key 2. Sen A. Description as choice. Oxford Economic Papers, 1980, steps involved in undertaking “value for money” 32(3):353–369. assessments. 3. Boardman A et al. Cost-benefit analysis: concepts and practice, 3rd ed. New Jersey, Pearson Prentice Hall, 2006. • When evaluating alternative policy interventions, it is important to use a research design that provides 4. Weatherly H et al. Financial integration in health and social care: credible estimates of the causal impacts of the evidence review. Edinburgh, Scottish Government, 2009. intervention under consideration, even in the 5. Gold MR et al., eds. Cost-effectiveness in health and medicine. absence of randomized experimental evidence. New York, Oxford University Press, 1996. • In practice, evaluations of social determinants of 6. Drummond M et al. Methods for the economic evaluation of health interventions will most often have to rely health programmes. Oxford, Oxford University Press, 1997. on quasi-experimental methods to estimate the 7. French R et al. Organizational behaviour. John Wiley & Sons Ltd, causal impacts required to measure programme 2008. effectiveness. 8. Dolan P et al. Estimating the intangible victim costs of violent crime. , 2005, 49:958–976. • Certain recommendations can be made up British Journal of Criminology front for the choice of evaluation methodologies 9. Dolan P, Peasgood T. Estimating the economic and social costs in the case of social determinants of health: of the fear of crime. British Journal of Criminology, 2007, in order to provide a more complete guide 47:121–132. to policy-makers evaluating potential future 10. Institute of Medicine. Valuing health for regulatory cost- interventions, a combination of structural models effectiveness analysis. Washington, DC, National Academies and meta-analysis to generalize evidence on Press, 2006. intervention effectiveness, together with estimates 11. Viscusi WK, Aldy JE. The value of a statistical life: a critical review of effectiveness and causal impacts in “natural of market estimates throughout the world. Journal of Risk and units” as directly measured in the evaluation, Uncertainty, 2003, 27(1):5–76. will be desirable. Additionally, it is necessary to 12. Arrow KJ et al. Report of the NOAA Panel on Contingent Valuation. consider that social policy is often desirable from Federal Register, 1993, 58:4601–4614. an equity perspective, an aspect that standard 13. Homer JF et al. Economic evaluation of adolescent addiction cost–benefit analysis does not normally capture. programs: methodologic challenges and recommendations. There is no consensus among economists on Journal of Adolescent Health, 2008, 43:529–539. how best to account for distributional effects 14. Zavala SK et al. Guidelines and challenges for estimating in cost–benefit analysis or cost–effectiveness the economic costs and benefits of adolescent substance analysis. abuse treatment. Journal of Substance Abuse Treatment, 2005, 29:191–205. • One possible avenue is the incorporation of desirable distributional effects through weighting 15. Cohen MA, PiqueroAR. New evidence on the monetary value of saving a high-risk youth. Journal of Quantitative Criminology, (with differentiated marginal utility depending 2009, 25:25–49. on income level). An alternative is to translate preferences to pay to help the most disadvantaged 16. Smith RD, Sach TH. Contingent valuation: (still) on the road to into standard willingness to pay measures. nowhere? Health Economics, 2009, 18(8):863–866. Equity-weighting analysis has been proposed 17. Smith RD, Sach TH. Contingent valuation: what needs to be as an extension of cost–effectiveness analysis done? Health Economics Policy Law, 2010, 5(Pt 1):91–111. that incorporates the value society places on 18. Claxton K et al. Discounting and decision making in the economic reductions in health inequities. evaluation of health care technologies. Health Economics, 2011, 20:2–15.

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19. Sassi FL et al. Equity and the economic evaluation of healthcare. 36. Jones A. Evaluating public health interventions with non- Health Technology Assessment, 2001, 5(3):1–130. experimental data analysis. Paper presented at the HEDG, CHE Research Conference, 2006. 20. Dolan P, Shaw R. A review of people’s preferences regarding the equity efficiency trade-off in health. Unpublished manuscript. 37. Supplementary guidelines for the Annual Review of Competence 2001. Progression (ARCP) for speciality registrars undertaking joint clinical and academic training programmes. London, Academy 21. Social and emotional wellbeing in primary education. London, of Medical Sciences, 2007. National Institute for Health and Clinical Excellence, 2008. 38. Ramanathan S et al. Challenges in assessing the implementation 22. Williams AH, Cookson RA. Equity-efficiency trade-offs in health and effectiveness of physical activity and nutrition policy technology assessment. International Journal of Technology interventions as natural experiments. Health Promotion Assessment in Health Care, 2006, 22(1):1–9. International, 2008, 23:290–297. 23. Richardson J. Is the incorporation of equity considerations into 39. Craig P et al. Developing and evaluating complex interventions: economic evaluation really so simple? A comment on Cookson, the new Medical Research Council guidance. British Medical Drummons and Weatherly. Health Economics, Policy and Law, Journal, 2008, 337:979–983. 2009, 4:247–254. 40. Nores M, Barnett WS. Benefits of early childhood interventions 24. Tsuchiya A et al. Incorporating equity weights into cost- across the world: (under) investing in the very young. Economics effectiveness analysis: opening Pandora’s box? Paper presented of Education Review, 2010, 29(2):271–282. at the Health Economics Study Group meeting, 2007. 41. Kenkel D, Suhrcke M. Economic evaluation of the social 25. Murray CJL, Lopez AD. The global burden of disease. Geneva, determinants of health: an overview of conceptual and practical World Health Organization, Harvard School of Public Health, and issues. Copenhagen, WHO Regional Office for Europe, 2011. World Bank, 1996. 42. Heckman JJ, Vytlacil E. Structural equations, treatment effects and 26. Harberger AC. Fiscal policy and income redistribution. Princeton econometric policy evaluation. Econometrica, 2005, 73(3):669– University, 1974. 738. 27. Cai B et al. Distributional preferences and the incidence of 43. Ne vo A. Taking the dogma out of econometrics: structural costs and benefits in climate change policy. Environmental and modeling and credible inference. Working Paper 0104. Center Resource Economics, 2010, 46(4):429–458. for the Study of Industrial Organization at Northwestern University, 28. Cookson R et al. Explicit incorporation of equity considerations 2010. into economic evaluation of public health interventions. Health 44. Weimer DL, Vining AR. Investing in the disadvantaged: assessing Economic Policy Law, 2009, 4(23):1–45. the benefits and costs of social policies. Georgetown University 29. Epstein D et al. Social determinants of health: an economic Press, 2009. perspective. Health Economics, 2009, 18:495–502. 45. Eckstein O. A survey of the theory of public expenditure criteria. 30. Fair society, healthy lives. The Marmot Review: strategic review In: Buchanan JM, ed. Public finances: needs, sources and of health inequalities in England post-2010. Marmot Group, 2010. utilization. Princeton University Press, 1961. 31. Mazzuco S et al. The economic benefits of reducing heath 46. Haveman RH. Water resource investment and the public interest: inequalities in England and Wales. Background Report to the an analysis of federal expenditure in ten southern states. Nashville, Marmot Review, 2010. Vanderbilt University Press, 1965. 32. Lavin T, Metcalfe O. Economic arguments for addressing social 47. Weisbrod BA. Income redistribution effects and benefit-cost determinants of health inequalities. EuroHealthNet, National analysis. In: Chase J, ed. Problems in public expenditures Institute of Public Health, Czech Republic, 2009. analysis. Washington, DC, Brookings Institution, 1968. 33. Petticrew M et al. Natural experiments: an underused tool for 48. Diener A et al. Health care contingent valuation studies: a review public health? Public Health, 2005, 119:751–757. and classification of the literature. Health Economics, 1998, 7(4):313–326. 34. Wanless D. Securing good health for the whole population: final report. London, HM Treasury, 2004. 49. Becker GS, Murphy KM. A theory of rational addiction. Journal of Political Economy, 1988, 96(4):675–700. 35. Bonnefoy J et al. Constructing the evidence base on the social determinants of health: a guide. Report to the Commission on 50. Weimer et al. 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45

Chapter 4. Can education policy act as health policy?

4.1 Efficiency-based rationales The most relevant market failure in education is the presence of large externalities. Despite the methodological 4.1.1 Economic benefits of education and difficulties of estimating the full social returns of education, different studies suggest that improved educational the presence of market failures attainment and quality would result in higher country-level here is abundant evidence of individual-level labour force productivity and economic growth (16–18). economic benefits resulting from greater quantity For instance, an increase in test performance by one T and quality of education. Early childhood education standard deviation is associated with a 1% increase in influences future outcomes such as labour market outputs, annual growth rates of GDP per capita (19). The present participation in welfare, teenage pregnancy and crime value of OECD aggregate gains from school improvements through children’s cognitive and social skills, academic from 2010 through to 2090 could be as much as 13.8% of performance and school progress (1–5). An additional the discounted value of future GDP (20). Higher education year of basic education was associated with an over 8% has also been shown to have had a strong causal impact increase in wages in Europe (6), while in Latin America on economic growth in France, Japan, Sweden, and the basic education entailed 50–120% higher earnings (7). As United Kingdom (21, 22), and to explain part of the growth for the benefits of better-quality education, an increase of gap between Latin America and Asia in 1991–1995 (23). one standard deviation in test scores resulted in a 12–48% Additionally, a one-year increase in the stock of tertiary wage increase (8), while a teacher whose effectiveness is education was estimated to raise the African GDP per one standard deviation above the mean entailed gains of capita by 12.2% (24). over $400 000 in student future earnings in the United There is a wide range of spillover effects through which States ( ). Higher education in turn has multiple individual 9 education affects overall development. Existing evidence benefits, including better labour market prospects ( ). 10 suggests that impairments during childhood, especially The wage premium of a college degree over high school in the early years, can entail significant long-term costs in the United States increased from about 40% to over for societies as a whole, in terms of foregone human 65% between 1980 and 2000 ( ), and can be up 11, 12 capital and therefore the loss of economic returns from to 200% in Latin America ( ). 7 the contributions of better prepared, skilled and more Imperfect information and the potential emergence of productive individuals (25). However, large associated monopolies, however, limit the efficient functioning of social costs would also derive from the implications of the education market, in the absence of government having to deal with childhood-related impairments and intervention. Consumers of education are most often not their consequences later in life (rather than preventing mature adults, and their education decisions are made them early on), in the form of (for example) health care by their parents or relatives. Parents, however, might not or unemployment expenditures and delinquency. Basic always be acting in their children’s best interest, often education in this sense can reduce fertility, improve health and nutrition, and promote other behavioural changes that due to information problems. The longer-term benefits drive economic development (26). Others have highlighted of education are not always fully evident, and collecting the potential benefits of basic education in terms of lower the necessary data to make informed decisions is a time- crime rates (27–30), increased political participation consuming process that not all people are equally able or (31–34), better economic and political governance, the willing to engage in. Hence, the expected returns from effect of a highly educated workforce on other workers’ additional schooling are often much lower than actual salaries, society’s health and social capital, and the impacts or realized returns, as evidence from the Dominican of research activities (7, 10, 35–38). If all of these wider Republic and Mexico indicates (13, 14), leading to less societal benefits of education were taken into account, than optimal investment in education. Monopolies may the social rates of return on investment in education are also arise in the education market, as certain geographical likely to exceed considerably the private rates of return areas are not sufficiently populated to support more than on higher education (almost double according to some one educational centre (15). estimations) (35, 39–42).

47 4.1.2 Does education have an Australia, Canada, the United Kingdom and the United impact on health? States suggests that more education can lead to greater utilization of preventative health care (45, 73–75). The impacts of education on health have long been established. Individuals with more years of schooling tend Children’s health outcomes are largely affected by to have better health, well-being and health behaviours their parents’ education. The Education for All Global in adulthood, and this effect is causal to a substantive Monitoring Report suggests that universal secondary extent (which is of course not to imply that all studies education for girls in sub-Saharan Africa could save as that demonstrate an association between education and many as 1.8 million lives annually, as better-educated health allow for strong causal inference). The effects mothers are less likely to have low-birth-weight children are particularly robust and large for adult depression, (76). Evidence from Asia and Africa suggests that child adult mortality, child mortality, child anthropometric mortality rates were 50% lower for children born to measures at birth, self-assessed health, physical health, mothers who attended secondary school (76). Improved smoking, hospitalizations and use of social health care quality of education speeds up the rate of decline in infant mortality ( ). Additionally, parental investments in (43–46). There is evidence that education can help 77 reduce chronic disease incidence and improve the their children’s education may have the effect of making children more future oriented and willing to engage in personal management of existing disease (47, 48), behaviours that have longer-term consequences for and that it can help reduce the prevalence of sexually better health ( ). transmitted diseases, such as human immunodeficiency 68 virus/acquired immunodeficiency syndrome (HIV/AIDS) 4.1.3 Avera ge impact of education (49, 50). A comparative study in Europe found that people with lower secondary or less education have elevated interventions risks of poor self-rated health and functional limitations A growing body of evidence confirms the individual and (51). For a cohort of Swedish men born between 1945 social economic value associated with particular changes and 1955, an additional year of schooling substantially in education policies, such as expanding access to reduced the likelihood of being in bad health (52). high-quality early childhood education. Education has been shown to be a reliable predictor of Several preschooling experiences in high-income countries lower mortality rates (53). There is abundant evidence that (Perry Preschool, Chicago Parent Center and Abecedarian the years of schooling tend to increase life expectancy for programmes in the United States; and the Effective individuals in the United States (54, 55), where eradicating Provision of Preschool Education project in the United education-associated excess mortality would avert almost Kingdom), and specific interventions in a number of 1.4 million deaths over a six-year period (1996–2002) low- and middle-income countries (including Argentina, (56). Sizeable mortality gradients by education for all age Bangladesh, Brazil, Colombia, India, Mozambique and groups and for both sexes have been found in Switzerland Uruguay), have been found to have a positive impact on (57), and mortality rates are 5% lower for more educated children’s cognitive ability, school readiness, educational men in the United Kingdom (58). The probability of being attainment and performance, measured using different in good or excellent health is higher for those with a post- indicators. In the cases where the impacts of preschooling secondary and university education in different countries programmes into adulthood have been evaluated, the (59, 60). Educational attainment is strongly associated results are compelling. Children that were enrolled in with risk behaviours for the health of young people, such the programme systematically show better results at as consumption of tobacco, alcohol and other harmful adult age in terms of wages, homeownership and rates substances, risky sexual behaviours, poor nutritional of imprisonment, for instance (48, 78–95). Additionally, practices and lack of physical activity (40, 61–71). These these interventions can help increase overall economic behaviours determine more than 70% of the morbidity well-being and tax revenues and reduce public expenditures and mortality experienced during youth and almost 66% for remedial education, criminal justice treatment and during adulthood (69, 72). Similarly, evidence from crime victims (91).

48 Chapter 4. Can education policy act as health policy?

Interventions to improve the quality of primary and secondary The direct impact of educational interventions on health is education by increasing available resources have also shown more clear with respect to type 1 place-based interventions positive effects. While many studies on the effect of additional aimed at encouraging healthier behaviours. School-based resources on educational outcomes across countries show interventions to improve sexual and sexually transmitted small positive impacts (96, 97), there is evidence that a disease-related knowledge and behaviours, as well as decrease in the number of students in a class increases smoking and drug prevention programmes, tend to show achievement levels (98), and that class size reductions can positive effects across countries, although evidence on improve performance, the length of education and lifetime their long-term health impacts remains limited (116–134). earnings in diverse countries, including Denmark, Israel, Other preventive health interventions in schools also South Africa and the United States (99–102). In lower-income show encouraging results, as is the case for services countries such as Kenya, Nicaragua, the Philippines and with regard to oral health ( ), diabetes ( ), Sri Lanka, the provision of learning materials (for example 135, 136 137 stomach worms ( ) and malaria ( ). School-based workbooks or radio instruction) had significant impacts on 138 139 healthy diet and nutrition interventions (for example pupils’ performance and drop-out rates (23, 103–105). school garden programmes) and programmes to prevent Information- and incentive-based interventions at the primary overweight and obesity are most often successful in and secondary level also show some positive results, but developed countries, while school feeding programmes more research on their effectiveness is required. Report lead to increases in weight and height for participants cards, which describe students’ achievement in absolute mostly in developing countries (140–162). terms and relative to other schools, improved learning by 0.10 standard deviation and increased enrolment in Pakistan Most type 1 interventions are related to using information (106). A school choice programme in Colombia also appeared to change culturally and socially influenced habits. Sexual to yield large benefits for participants (100, 107). However, behaviours and substance use among children and young evidence from different voucher programmes in Chile, Spain people are to a large extent determined by what is perceived and the United States seem to indicate that more research to be socially accepted or encouraged. This is similarly on these interventions is required (108–110). On the other true of behaviours related to sports and nutrition, which hand, results from India, Israel and Kenya suggest that are largely influenced by the entourage and patterns teacher incentives positively and significantly affected student that children and youths tend to observe as positive or short-term educational outcomes, although evidence is not referential. Interventions that aim to generate a change so clear with regard to longer-term outcomes (111–113). in unhealthy lifestyles among young people and children therefore normally entail a social values shift, and therefore In comparison to the evidence available on a range of make use of tools such as peer education to effectively educational interventions, evidence of subsequent direct encourage that necessary cultural transformation. health impacts of type 2 (with health partnerships) and type 3 (with health advocacy) interventions in education Pure resource-based higher education financial aid remains scarce. The direct health impacts of early programmes have been widespread in liberal countries. childhood education have rarely been evaluated and A $1000 change in college costs (1990 dollars) in the remain limited to lower smoking rates in adulthood United States was associated with an approximately in the case of high-income countries. In low- and 5 percentage point difference in college enrolment rates middle-income countries, the evidence of health impacts (163, 164). The United States Social Security Student is mixed. However, a recent study found that increasing Benefit programme and the World War II G.I. Bill (box the relative teacher wage by one standard deviation can 4.1) had generally significant effects on both collegiate result in about 1.9 less deaths per 1000 people per extra enrolment and completion (165, 166). Regarding tax year of basic education (114). Improvements in school credits, and although overall eligible individuals are more quality in turn broaden the beneficial effects of education likely to attend college, there is no differential increase on several measures of health later in life, including in enrolment after the introduction of such instruments self-rated health, smoking, obesity and mortality (115). (167–169).

49 randomly assigned to receive a scholarship depending Box 4.1 From resource- to incentive-based on their grades found that it improved performance and interventions in higher education in the United persistence of female students and achievement levels States of male students (171, 172). The primary instruments for United States federal policy designed to increase collegiate attainment over the last three decades have been the programmes under Title IV of the Higher Education Act, notably Pell grants and Stafford student loans, tuition tax credits and 4.2 Equity-based rationales specially directed aid aimed at specific populations (G.I. benefits and the Social Security Student Benefit 4.2.1 Equity aspects in education programme). These forms of aid have been based on The right to equality of opportunity in education is based family income level and thus targeted the lower-income tiers in the population. on the recognition that education has a fundamental effect on the recipients’ and their children’s lives. Education In 1996, the United States Government developed two proves to be a major determinant not only of lifetime large tax credit programmes, the Hope Learning Credit income but also of the quality of life throughout generations. and the Lifetime Learning Tax Credit, which marked a shift in the way that governmental support would For instance, it has been shown that children born to be distributed to postsecondary students and their parents in the bottom income quintile in the United families. The programmes targeted middle-income families States have a 45% probability of remaining there as that were excluded from other forms of aid, and good adults when they do not have a degree, compared to performance students (merit based). While it may only less than a 20% chance when they hold one. The right be used for a student’s first two years of postsecondary to education is included in the Universal Declaration of education, the Lifetime Learning Tax Credit is available Human Rights (adopted by the United Nations General for unlimited years to those taking classes beyond their first two years of college, including college juniors and Assembly in 1948) and in several subsequent high-level seniors, graduate students, and working adults pursuing policy initiatives, including the Millennium Development lifelong learning. For each credit, the expenses covered Goals. Accordingly, most societies require that education are tuition and required fees at an educational institution is distributed equitably, which is usually interpreted as eligible for aid. Additionally, and mostly following the the need to ensure equality of access for the minimum example of the Georgia HOPE programme, other merit- amount considered socially necessary (15). based subsidy and scholarship interventions have been introduced at the state level. Education access and performance are heavily determined by family background. Family income and the environment The more recently introduced combination of resource- in which children live at early ages appear to predict and incentive-based financial aid appears to have educational outcomes in adulthood, mostly through the been especially effective. In the United States, many development of cognitive and non-cognitive (emotional, different state subsidies or grants programmes based behavioural) abilities that are key for the future on merit have been found to raise college attendance opportunities of children (2, 57, 173–185). Differences rates, such as HOPE in Georgia (by 8.6%) and others in the home environment can in fact explain up to half subsequently developed in Arkansas, Florida, Georgia, the social gradients in child behaviours (186). A socially Kentucky, Louisiana, Mississippi and South Carolina (by inequitable distribution of education is thus likely to exist 4.7% on average), and to increase choice of four-year in contexts where income is unequally distributed. colleges. Other programmes, including a West Virginia Differences in access, attainment and performance incentive scheme for college students or a California grant across countries are often related to the different market programme offering free tuition or grants to students who failures highlighted in section 4.1. Informational gaps maintained a certain minimum grade point average, were among students are particularly important in primary and found to have substantial effects on achievement (168, secondary education, across all countries. School choice 170). Two studies following Canadian students who were mechanisms tend to generate better outcomes for families

50 Chapter 4. Can education policy act as health policy?

who are more informed – normally better-educated in fact especially targeted at disadvantaged groups (84, and more affluent families. Information is therefore one 85, 95). of the drivers of the correlation between educational There is some evidence of the equity impacts of resource- outcomes and a family’s socioeconomic circumstances and incentive-based interventions at the primary and (187). In developing countries, in particular, the direct secondary levels across middle- and low-income countries. and opportunity costs of education for children often For instance, the Full Time School programme in Uruguay, remain key obstacles to access and completion, as well which doubled the schooling hours and provided additional as distance to schools and lack of adequate facilities materials, classrooms and teachers for sixth-grade primary on the supply side. All these challenges and problems school students, had a positive effect on mathematics lie behind disparities in educational outcomes that in and language test scores, especially among relatively turn constitute major social determinants of health and disadvantaged schools (198). The abolition of school health inequities. fees in a poor area of South Africa appeared to be The equity implications of higher education interventions effective in increasing secondary school enrolment in remain a key scholarly question. It is often argued that the poor communities (199), while a scholarship programme expansion of higher education could mostly benefit the in Indonesia had a strong impact on reducing drop-out already privileged, therefore widening inequality. Different rates at the lower secondary level during the economic authors report greater responsiveness to tuition differences crisis (200). Private school tuition vouchers allocated to among those from lower income quartiles (188–191) and students from low-income neighbourhoods in Colombia find larger impacts of tuition on the enrolment decisions increased academic achievement (107), while, on the of low-income youths (169, 192). Other studies, however, other hand, an educational subsidy in Côte d’Ivoire fail to find such income interaction effect (39, 193, 194). seemed to especially benefit higher per capita expenditure A recent comparative study on the connection between groups (201). inequality and tertiary education across high-income Some type 1 primary and secondary school-based health countries found that educational expansions tend to education programmes can also have equity implications. attenuate inequalities when they reach a “saturation” An elementary school-based obesity prevention intervention point, where educational attainment is nearly universal. in the United States led to improvements in body mass Inequalities were in this way reduced through tertiary index (BMI), blood pressure, and academic scores of education expansions in China (Province of Taiwan), students, especially for low-income Hispanic and white Israel, Italy, Japan, Republic of Korea and Sweden, and children (150). Another after-school obesity prevention remained stable in most other countries (195). programme for low-income African-American girls had a positive effect for BMI measures (202). A school- 4.2.2 Equity impacts of interventions based intervention targeted at low-income children that Suitable child development interventions can help equalize included dietary improvement, curriculum development opportunities for low-income children. Evidence from and physical activity improved health indicators related to developed and developing countries alike shows that weight and academic performance (151). School meals early child development programmes allow counteraction may also have some small benefits for disadvantaged of some of the negative consequences associated with children (154). inequality of opportunity (2). The positive impact of early Information-based interventions could have potential to childhood education on children from poor families improve higher education equity outcomes. Low-income is twice as high as for those from more advantaged students in the United States apply to fewer and less backgrounds (196). Some of the programmes reviewed had selective colleges, mainly due to lack of information important equity impacts, proving to be more beneficial for associated with their geographical isolation. Counselling disadvantaged children (83, 88, 197). Other programmes interventions aimed at improving information thus show such as the Oklahoma Pre-K, the Michigan School some positive effects in the choice of college (203). Readiness or the Head Start in the United States were Further demonstrating this trend, improved information

51 on eligibility for financial aid and college options, and relative increase in participation for the middle of the assistance with the federal application for financial wealth distribution, and among females (210, 211). It is aid, resulted in an increase of 25% to 30% in college however found that income-contingent loans could raise enrolment (204). A small change in policy for ACT (one tuition fees substantially in Germany (212). of the two college aptitude testing organizations in the Different financial support formulas for higher education United States), consisting in giving students four free exist throughout developing and emerging countries, score reports instead of three, which improved the although evidence on their impact remains limited. amount of information available to students, produced a The Sociedad de Fomento a la Educación Superior (Society 20% increase in student applications to colleges (205). for the Promotion of Higher Education), implemented at The equity impacts of pure subsidies available to students private universities in Mexico, provided financial aid to across high-income countries remain unclear. Although lower-income students and was effective in improving lowering the costs of education through public subsidies, academic enrolment and performance (213). A recent tax credits or limits on interest rates and financial evaluation of the Student Loan Fund in Thailand, which obligations may in principle achieve greater equity in the provides financial support to low-income family students financing of postsecondary schooling, the equity effects to access higher education, found significant effects on of such schemes remain often unclear mainly due to the participation for those students whose family income lack of harmonized data that allow understanding the was close to the poverty line, but few effects on students social composition of the population (206). Some studies with higher incomes, which could be due to the fact that find positive effects of more generous financial aid or the income threshold for the loan was too high (214). programmes targeting resources for low-income students (135, 207), but a good share of students do not respond to them. The United States Pell grants programme, for 4.3 Value for money instance, did not change enrolment or college completion Cost–benefit analysis of interventions presents particular for lower-income students (208). Additionally, merit-based difficulties in the education sector. Calculating the grants in the United States do not show different relative social costs and impacts of educational programmes effects on blacks and Hispanics (170). Tax credits, in is particularly challenging (see box 4.2 for preschool turn, seem to mostly benefit middle- and upper-income interventions), as it is to identify their distribution across students in the United States, as claiming tax credits or different social groups. Measuring the costs and benefits deductions would reduce the ability to benefit from other of dimensions of education other than access to a year subsidized instruments. of attendance is also problematic, while the attribution Resource- and incentive-based financial aid interventions of outcomes to actual interventions, as with all other show equity effects at the higher levels. An analysis of interventions, presents particular difficulties. Finally, there different formulas of deferred and income-contingent are numerous factors that limit the external validity or tuition fees in Belgium, Germany and the United Kingdom general applicability and comparability of results. concluded that both the human capital contracts15 and There is however a large body of evidence on the high income-contingent loans16 have vertical equity properties quantifiable benefits of preschooling, an area that has because non-graduates do not pay, but also because the received much recent attention. It is estimated in this income contingency principle entails a redistribution of sense that health problems originated during childhood, income among graduates (209). The income-contingent including early life tobacco exposure, unintentional injury, charge system for higher education in Australia resulted obesity and mental health, and that affect approximately in a more equal distribution in access, and a marked one third to one half of children born in the United States, 15 H uman capital contracts require former students to repay a fixed could have a total social cost of about $50 000 per child, proportion of their income. which translates to $65 100 billion for the entire birth 16 Income-contingent loans require graduates to repay a fixed amount cohort of children (215). In this sense, the health gains each year if their current net income is above a certain threshold. produced by preschool and class size interventions alone

52 Chapter 4. Can education policy act as health policy?

children in poverty far exceeds its costs ( ). A net Box 4.2 Calculating the costs and benefits of 217 return of between $3 and $17 per $1 invested has early childhood education been identified by different studies for the United States For preschool programmes, the largest category of Perry Preschool, Child-Parent Center and Abecedarian costs is the cost of instructional staff. In the Child- programmes (218–221). Net present value varied from Parent Center programme, for example, instructional $75 000 to over $200 000 per child. Based on those costs amounted to 43% of the total programme costs. studies, the annual rates of return from preschooling The next largest categories of costs include costs for programmes targeting vulnerable children exceed what administration, operations and maintenance, family can be earned in the private sector on very low-risk support staff, capital depreciation and interest, and investments (222). The Michigan School Readiness the value of parents’ time spent in the programme (91). programme in turn can save the state an estimated Benefits to the participants (through increased earnings) $13.6 million annually only by decreasing grade repetition are experienced by the child and parents but do not (93). Consistently positive economic returns of high-quality directly benefit others. Based on cost–benefit analysis preschool programmes are much higher than those of of three model preschool programmes (Abecedarian, most other educational interventions, especially those Perry and Chicago Child-Parent Centers), average that begin during the school-age years, such as reduced earning capacity increased from about $31 000 to class sizes in the elementary grades (221). $43 000 per participant. Increased maternal earnings Although scarcer, some evidence of the potential benefits were the largest source of economic returns in the of educational interventions at higher levels exists. case of the Abecedarian programme (over $73 000 A simple cost–benefit analysis of class size reductions per person). suggests that such a policy would bear very modest Benefits to the general public include reduced net benefits. The ratio of benefits to costs would range expenditures for remedial education and social from a maximum of 1.9 for males (with a discount rate welfare services by governments, reduced tangible of 0% and a 3% increase in income) to a minimum of expenditures to crime victims, and increased tax 0.08 for women (using a 0.06 discount rate) (223). The revenues due to the participants’ higher earnings. STAR programme in Tennessee (United States), which Crime savings was the largest economic benefit by basically consisted of a reduction in class sizes during far for the Perry Preschool programme ($90 246 per the early years of elementary school, has been found to participant), and the largest category of economic have a benefit–cost ratio of 2.83 (224). The school-age benefits for the Child-Parent Center programme Child-Parent Center programme, of which the main ($36 902 per participant). Benefits to society at large element was a reduction in class size from 35 to 1 include the sum of benefits to participants and the (teacher) to 25 to 2 (teacher and aide) during grades general public. 1–3, was found to have an economic return of $1.66 per There is also a set of benefits of preschool education $1 invested (221). The annual value of the benefits of that typically are not included in cost–benefit college tuition subsidies in Minnesota is estimated to be analyses: improved social and emotional outcomes; between $531 million and $786 million (225). social cohesion (or citizenship); improved health of Some studies appear to indicate that information- and participant’s future spouse and children; increased incentive-based interventions tend to be less expensive educational attainment of participant’s children; than resource interventions. There is evidence that increased saving; and increased charitable giving (35). the implementation of formative assessment, a typical informational but also incentive-based intervention, may exceed the costs of such programmes, with estimated would help improve educational achievement while using savings of $3000 to $21 000 per student (216). fewer resources than other types of interventions (226). Cost–benefit analysis systematically finds that the Class size reduction programmes in this sense have economic return from providing early education to been found to be 124 times less cost-effective than the

53 implementation of systems that assess student progress liberal countries. The existing evidence from interventions (227). Regarding school-based type 1 interventions, systematically indicates that preschool programmes bear different analysis of the Expanded Food and Nutrition significant implications for the future opportunities of Education programme in the United States showed children. The evaluation of other interventions at higher that these programmes can be very cost-effective, levels also generally shows relevant effects for educational mainly through the prevention of chronic diseases. outcomes that affect long-term opportunities. Studies that The cost–benefit ratio of the programme ranged from assess the direct impacts of educational interventions on $2.66/1.00 to $17.04/1.00 (228, 229). health remain however scarce, with the exception of type 1 centre-based programmes that mainly aim to influence There is evidence of the high financial returns to or reduced children and young people’s health-related behaviours. costs of education in terms of health. The monetary Generally, these programmes appear to be successful in value of the return to education in terms of health is improving the knowledge and attitudes of participants. perhaps half of the return to education on earnings (44). The health returns to education are estimated to Education interventions can also have a relevant equity be 1.3–5.8% in the Netherlands (230). It has been impact, although more evidence in this regard is estimated that education would reduce the total cost of necessary. Some early childhood education programmes, depression for the population of interest by £200 million primary and secondary school-based health education a year in the United Kingdom (231), and that one interventions, and financial support formulas (such additional year in schooling equals between $1700 and as the income-contingent loans and human capital $17 700 income increases in terms of health in the contracts and information-based interventions for United States (52). Expanding education to females is also higher education) have shown redistribution effects. estimated to potentially be a cost-effective intervention However, evaluations to date have mainly focused on to lower HIV/AIDS prevalence in the United Republic of the efficiency “average” impacts rather than on their Tanzania. The best estimates result in positive net benefits, implications for equity. From the social determinants with benefit–cost ratios in the range 1.3–2.9 (232). of health perspective, devoting more efforts to the assessment of the differentiated impacts of policies with regard to specific groups remains a key challenge, 4.4 Conclusions especially considering the methodological difficulties The economic justification to invest in education is that such effort might entail. evident from the existing research. Education largely Regarding the value for money of interventions, determines short- and long-term outcomes for the cost–benefit analysis studies normally attribute net individual, mostly in connection with labour markets and benefits to education interventions. This is particularly future income. The presence of market failures such as the case for early childhood education, where most information asymmetries, monopolies and externalities available evidence is concentrated, but also for other clearly justify public intervention in the sector to ensure education programmes at higher levels. The monetary that it produces efficient outcomes. In this sense, there value of education interventions in terms of health, when is a clear association between the quantity and quality of evaluated, is high. More evidence in this regard, applied education at all levels and economic growth and overall to a wider range of interventions and country contexts, development, directly through production benefits but also would make a significant contribution to the knowledge indirectly through spillover effects and social benefits. In of what works best and at what cost when prioritization particular, education can have relevant impacts for health is required in the decision-making and policy-making behaviours and conditions throughout life. processes, especially from a social determinants of Evidence from specific interventions confirms the economic health perspective. value of education (table 4.1). The efficiency impacts of In view of the multiple linkages between education and interventions have been more widely researched with health, collaboration between both sectors can yield regard to early childhood education, and in high-income substantial social benefits. Cross-sectoral collaboration

54 Chapter 4. Can education policy act as health policy?

has been emphasized by the Millennium Development programme of WHO. Specifically, the Health Promoting Goals, and many specific initiatives that recognize these Schools movement has helped generate evidence on linkages have been developed, including the Focusing the benefits of joint action, and showed that education Resources on Effective School Health programme of inequities remain a key challenge to improving health the United Nations Educational, Scientific and Cultural and educational outcomes (233). Although more Organization (UNESCO), the Child-Friendly Schools research in this field is required, a closer collaboration programme of the United Nations Children’s Fund between the two sectors clearly represents a promising (UNICEF), the School Health and Nutrition programme avenue to effectively tackle the social determinants of the World Bank, and the Health Promoting Schools of health.

Twelve key points: education and health Efficiency-based rationales is a major determinant of future income and quality • There is abundant evidence that greater quantity of life. and quality of education results in individual-level • Education access and performance are heavily economic benefits, due to increased labour market determined by family background, including family participation, increased participation in welfare, income and environment, which strongly influence and a reduction in negative behaviours, including cognitive and non-cognitive abilities. engagement in crime. • Of key importance is ensuring that interventions • However, imperfect information, for example on to rectify market failures reach the most needy the longer-term benefits of education, may lead to recipients; for example, ensuring that preschool or market failure in education, providing justification for higher education interventions do not only benefit government intervention to support advantageous those who are already privileged. initiatives. • Suitable child development interventions can help • The positive impact of education on a wide range equalize opportunities for low-income children, of health outcomes is well established, and extends including through provision of additional teachers, to both parents and their children. classrooms and resources. • Individual and social economic value is associated • Various targeted interventions, including subsidies, with resource-based interventions such as expanding access to high-quality early childhood education, loans and other financial support formulas, can have and effective preschooling programmes can have positive impacts on children’s health outcomes a major positive impact on all aspects of adult life, by a number of indicators, including obesity and including health indicators. blood pressure. • Information- and incentive-based interventions at Value for money primary and secondary school levels show positive • Cost–benefit analysis of interventions in the results, including for health indicators, though more education sector is difficult, given the complexity research on their effectiveness is required. of factors that are operating. Equity-based rationales • However, there is a growing body of evidence that • The right to equality of opportunity in education is the economic and health-related returns on school- based on the recognition that quality of education age interventions, particularly those targeting early has a fundamental effect on recipients’ lives, and education, far outweigh the costs.

55

The . ) . ) $9000. alue for money 84 235 V participation ranges certain assumptions) of the health effect of Head Start ranges from $6000 return is estimated from $11 704 to internal rate of $3756 (3% and the programme per year and student to to be 7.9% (under ( ( The annual cost of The present value 7% discount rates)

. ) 84 . ) 235 Equity aspects between children bottom quartile low-income families, participation can a range of adult outcomes ( Found to close one on children from family income for socioeconomic focus of Head Start from Head Start with median and health benefits reduce persistent health disparities third of the gap ( As a result of the

,

,

6

and 7 social . . ) ) social behaviour 7 percentage 84 82 emergent literacy , y Significant improvement vention effect ranged from Other effects percentage points more likely percentage points more likely points less likely to be idle, percentage points less likely to be problem solving, of vocabular and learning engagement (effect size for the nine skills showing an Participants were about 8.5 REDI: emotional understanding, in poor health ( inter 0.15 to 0.39) ( to graduate from high school, to have attempted at least one year of college,

). economic and equity impacts 234 y of health, Health effects of smoking ( Reduced probability

vention

ventions: summar including early and nutrition vices, vices. Description preschooling programme aged 3 to 5 years with comprehensive support childhood education, activities and specific Resource-based ser ser REDI (research-based universal child care and health, hands-on extension developmentally informed) is enriched inter that provides children teaching strategies. that involves brief lessons,

vention

vention – ype 2 Inter able 4.1 Education inter United States High-income countries some Head Start and Head Start REDI health sector inter involvement of T T

56 Chapter 4. Can education policy act as health policy?

to

s

). y dollar 220 According ). alue for money 218 V between 7 and 10% benefits range between $13 and social rates of Estimated annual return generally fall more recent findings, invested ( $17 for ever the programme’ (

argeted at poor Equity aspects children. T

were

45%),

62%),

had At age

28%), 50%), Fewer were . ) higher percentage of 55%) and significantly 52% ever sentenced) 92–94 79, Other effects performance in adult life. annual earnings ($20 800 vs. account (76% vs. commitment and attainment at age 14 and graduation rates. arrested or imprisoned. significantly fewer lifetime arrests Higher school readiness, Higher median annual earnings, from high school (65% vs. fewer months in prison or jail had significantly higher median homeowners (37% vs. responsibility and educational rates at age 27. employment and house ownership more likely to have a savings Significantly improved social $15 300), to be employed (76% vs. (36% vs. (28% vs. ( 40 more likely to have graduated

. ) 222 Health effects Lower smoking rates in adulthood (

.

vention that provides Description children living in poverty Resource-based high-quality preschool education for young inter

vention vention – y Preschool ype 3 Inter United States programme presence of Perr no evident health sector inter T

57

The y modest . ) benefits. alue for money 223 V benefit analysis bear ver a policy would suggests that such and a 3% increase for males with a net ratio of benefits range between 1.9 for women using a Not assessed. discount rate of 0% in income to 0.08 0.06 discount rate to cost would ( A simple cost–

Equity aspects Not assessed. Not assessed.

). The class

223

y schooling by 5% Other effects lifetime earnings ( compulsor of education by about 0.0375 approximately a 0.2% increase in Reducing class size during size reduction translates into Not assessed. would increase mean length the current mean class size) years (about 8 days). (about a unit reduction from

. ) 236 Health effects partners in the past Not assessed. at two-year colleges a decline in the number of sexual marijuana (by 23%) in tuition and fees is associated with in the past month year (by 26%) and the number of days youths smoked (by 14%) and used ( A $1000 reduction

such ). 223 ariation in actual class ariation in college costs Description class size in 8th grade. size and administrative size in Denmark driven by random variation in cohort rules that place a cap on reductions ( across states can be used on teenagers’ health- as sexual partnership and substance use. related behaviours, the interaction between the impact of class size to analyse their impact Can be used to evaluate V V

vention vention – vention – ype 3 ype 3 Inter United States presence of presence of Denmark reductions no evident health sector reduction no evident health sector inter inter Class size College costs T T

58 Chapter 4. Can education policy act as health policy?

y around it costs

While . ). ) vention ranged ). alue for money 237 210 81 V less than 2–3% of per annum, out to be ver administrative terms currently collected of return to the and benefit–cost other assumptions) HECS has turned from 16% to 14% ratios from 2.5 to discount rates and inexpensive in inter $800 million is this to administer ( (2001). ( ( The estimated rate 19 (depending on

. ) 210 ). 81 Equity aspects larger for children of levels of education prospective students changes operated in attendance was Neither HECS nor from relatively poor families ( higher fees) resulted mothers with lower in decreases the participation of ( The effect on school 1997 (translated into

). 210 ). 81 Other effects participation ( points more likely to be in school associated with aggregate accumulated 0.8 extra years of compared to their untreated school attendance and retention. siblings ( By age 15 treated children have education and are 27 percentage increases in higher education Significant and positive effect on The introduction of HECS was

Health effects Not assessed.

Australia at was accompanied y school classrooms -income students’ vention consisting Description loan scheme to prevent lower primar by an income-contingent availability of public pre- adverse effects on classrooms provided). charges in Resource-based system of university enrolment or performance. inter in the expansion of the end of 1980s, the Higher Education Contribution Scheme (ages 3–5) from 1995 to (HECS), 2002 (around 784 more The introduction of a

y school

vention vention – vention – iddle- and low-income countries ype 3 ype 3 Inter Uruguay loan for low- public pre- primar presence of presence of M contingent students Expansion of no evident health sector no evident health sector education Income- inter income higher inter Australia T T

59

alue for money V Not assessed.

argeted at families Equity aspects Not assessed. in low-income areas. T

The

). ). 238 versus 21.8% in 239 ( months

Other effects programme improved learning, but only for children in schools programme (0.4 of a standard participated in school 29% of the time, Positive impact on all skills (2% to where the teachers were better deviation) ( in the programme for at least the comparison group. trained at the onset of Children in the treatment group 10%) for children who had been 13

).

238 ).

s height or 239 -age for short Health effects points) on weight- programme abilities or on the children’ Negative impact for weight ( exposure (less than impact on cognitive (7 to 9 percentage There was no 12 months) (

randomly

It is a full-time and health Food is provided vention where child Description programme that provided chosen from a pool of 50 child development care is provided in homes of women in low-income areas. offered. and free programme. subsidized breakfast in schools. Resource-based Resource-based early needs), nutrition monitoring and educational activities inter (70% of nutritional 25 preschools,

s

vention

vention

vention – vention – ype 1 ype 2 Inter programme control some Preschool Kenya Programa Desarrollo Bolivia falls within the health sector’ health sector Integral de Infantil (PIDI) meals inter inter involvement of the inter T T

60 Chapter 4. Can education policy act as health policy?

).

240

-bound The child. alue for money V performing schools. per positive result ( cost of the costs of providing and households analysis would always lead to a for a cost–benefit was comparable to welfare of children exercise was $1 entire population in initially well- information to the the fee reduction Considering only the The upper

. )

240 Equity aspects private schools that baseline test scores especially large for were below median deviation) ( (at 0.34 standard The results are

. ) 240 Other effects by 0.1 standard deviation and Report cards improved learning decreased private school fees by 18% (

Health effects Not assessed.

vention that provided Description learning report cards school and child-level Pakistan. Information-based school inter in half of the villages

vention vention – ype 3 Inter presence of cards Pakistan no evident health sector inter School report T

61

alue for money V Not assessed.

Equity aspects Not assessed.

Other effects Not assessed.

,

Scores

vention

Increase . ) vention schools 116 Health effects knowledge between 0.5 and combined strategies. contraceptives with condom use were combined strategies showed significant schools showed a significant positive shift in attitude students’ perceived self-efficacy for safe and reported significantly higher gains. was greatest especially for mean increase inter in knowledge 0.9 points. towards use of that measured the (+5.0 points) for ( All three The inter

y school peer -led, eacher Description programmes developed among secondar students in Ibarapa education and combined district. T

s

vention

vention vention – ype 1 Inter prevention programme in control HIV/AIDS Nigeria falls within the rural areas health sector’ inter School-based the inter T

62 Chapter 4. Can education policy act as health policy?

alue for money V Not assessed.

. ) argeted at low- 213 Equity aspects income students ( T

A .

The GP

although the . ) 213 vey data however suggest that Other effects percentage point higher chance points ( of financial support have a 24 of university enrolment. standard deviation), side increases by 8 percentage results from the discontinuity regression analysis are smaller improves by 3% (or 25% of the Students who receive some kind Sur the likelihood of working on

Health effects Not assessed.

which -income and high- Description loan programme lower provided financial aid to Promotion of Higher Education is a student universities, implemented at private talent students. The Society for the

vention vention – The table describes impacts from a non-exhaustive list of programmes with the aim covering examples different regions world and development or welfare contexts.

ype 3 Inter la Educación presence of of Higher Fomento a Education) no evident health sector Mexico inter Sociedad de Superior the Promotion (Society for T Note:

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69 189. Kohn M et al. An empirical investigation of factors which influence 205. Pallais A. Why not apply? The effect of application costs on college-going behavior. Annals of Economic and Social Measures, college applications for low-income students. NBER Economic 1976, 5:391–419. and Education Program. National Bureau of Economic Research, 2008. 190. Manski C, Wise D. College choice in America. Harvard University Press, 1983. 206. Asplund R et al. An equity perspective on access to, enrolment in and finance of tertiary education. Education Economics, Special 191. Radner R, Miller LS. Demand and supply in U.S. higher education: Issue: Funding, Equity and Efficiency of Higher Education, 2008, a progress report. American Economic Review, 1970, 60:326–334. 16(3):261–274. 192. Kane TJ. College attendance by blacks since 1970: the role of 207. Desjardins S, McCall B. The impact of the Gates Millenium college cost, family background and the returns to education. Scholars Program. 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Chapter 5. Can social protection act as health policy?

5.1 Efficiency-based rationales deteriorations 20 years later (10, 11). Social insurance and social assistance can protect family investments in 5.1.1 Economic benefits of social protection education and health, allowing children to stay in school or granting certain nutritional standards in the face of and the presence of market failures financial shocks. This, in turn, can translate into substantial he arguments to invest in safety nets and social social savings in the future, and into benefits in the form security systems have traditionally revolved around of a better-prepared and more productive workforce and Tthree main objectives, which are in turn related to more cohesive societies. In South Africa, for instance, 17 important market failures: labour market participation among those receiving cash • Diminishing the risk of catastrophic expenditures transfers increased by 13–17% compared to similar that can be generated by life events such as death or non-recipient households (12). The old age pension unemployment, and which could easily push individuals scheme in South Africa appears to have beneficial health and families into poverty. Conventional or private and nutrition effects on young children, and to reduce insurance markets do not provide adequate coverage child labour (13). A review of social protection impact against these circumstances for the people who are evaluations, the majority of which are conditional cash most vulnerable to them, and imperfect information transfers, showed that safety nets improved immediate and lack of access to financial resources prevent consumption, current economic activities, investments many individuals from protecting themselves and their in human capital, and abilities to mitigate the negative families through such mechanisms. effects of shocks (14). • Facilitating associated positive externalities, such as those related to preserving and increasing consumption Several social protection policies are geared towards and investments in human capital and productive ensuring adequate nutrition during childhood. Inadequate activities by the poorest groups as they reach some nutritional standards during childhood can have long-term degree of financial stability. The lack of adequate impacts, especially in developing countries. Low birth information about the potential benefits of human weight has been shown to have large and statistically development or productive investments, or conflicts significant negative effects for developmental levels of interest regarding the use of resources within the (15, 16). Different studies have shown that children’s household, may lead to inefficient outcomes (1–8). nutritional status determines adult labour market outcomes • Allowing the compensation of potential damages to via affecting educational attainment and performance those groups or individuals that have been adversely (17–21). Breastfeeding, for instance, plays an important affected by the adoption of certain policy reforms. role for children’s nutrition. In high-income contexts it is associated with the increased probability of being Large or repeated shocks can force people to sell off their in excellent health at 9 months (22). Furthermore, it is productive assets or cut down on human development protective against obesity in later life, improves cognitive investments for the sake of sustaining nutrition and outcomes and may have long-term benefits related to consumption. Health shocks have been found to have large blood pressure and total cholesterol and performance effects on consumption in countries such as Indonesia (9). in intelligence tests (23–25). In the case of developing Children affected by the 1980s crises in Zimbabwe and economies, a recent study in Bangladesh shows that Ethiopia were found to experience height and education infants breastfed at birth have significantly better chances

17 As the evidence citations are intended to be useful to intersectoral of survival (26). dialogue and action, the evidence referred to in this chapter focuses Social protection can operate as a driver for economic mostly on social protection measures beyond specific protection for access to health services. But in some instances, reference is made to growth and overall development, and can play a key role the literature on the specific measures to address social determinants, during macroeconomic crises. As recognized by most in particular related to nutrition and perinatal programmes, which international development organizations, effective social may in some contexts be provided by health services with little collaboration with other sectors, while in other contexts they may protection instruments are relevant means for long-term form part of intersectoral or integrated social programmes. inclusive growth, as they allow capital accumulation and

73 investment, improve labour capacity and productivity, and on the social determinants of health throughout the contribute to risk management and offer diverse potential developing world. A review of the existing evidence on the advantages to non-beneficiaries (“multiplier effects”). effectiveness of conditional cash transfers in improving The potential macroeconomic role of social protection access to care and health outcomes, in particular for instruments as automatic stabilizers for urgent fiscal poorer populations in low- and middle-income countries, stimulus has been recognized internationally (27, 28). concluded that most programmes showed a positive There is evidence that redistribution of spending power impact on the use of health services, nutritional status from upper- to lower-income groups through transfers and health outcomes, assessed by anthropometric can increase national spending on local goods, supporting measurements and self-reported episodes of illness (35). national enterprises and improving the trade balance A more detailed review of the efficiency impact of the ( ). Social protection is additionally associated with 12, 29 specific programmes, presented in the following section, social stability and less conflict and delinquency (14). further confirms these findings. Additionally, social protection can reinforce the positive impact of macroeconomic policies, benefiting groups that might otherwise be disadvantaged by economic growth 5.1.3 Average impact of social strategies such as lowering import tariffs or reducing protection interventions subsidies (30). Resource-based type 1 interventions that can be allied with the theme of social safety nets refer to the provision 5.1.2 Does social protection have of services by the health sector itself and for this reason an impact on health? are not elaborated here in too much detail, given the While there are important methodological challenges to more intersectoral focus. It is interesting however to assessing the causal impact of social protection systems on note the impacts of some of the actions addressing health, some evidence exists in favour of such a link. Some health determinants from within health programmes that research highlights the potential role of social protection are often under the direct control of the health sector, regimes in predicting population health outcomes. The type but which, depending on settings, may require some of welfare state accounted for 20% of the difference in intersectoral engagement. Evidence shows that social infant mortality rates and for 10% of the differences in protection programmes that include a component aimed at low-birth-weight rates across 19 developed countries. improving the nutritional status of young children have a A comprehensive social protection system often resulted relevant impact on their long-term outcomes. Nutrition and in better population health outcomes, due to the role of supplementation programmes – which may stand alone welfare services and health systems (31). (provided by the health sector) or be integrated with other Social insurance (or lack thereof) can have considerable social programmes – appear to be especially important effects on health and its social determinants. For example, for improving children’s physical well-being and growth elderly people affected by the 1996 pension crisis in the across countries, especially in middle- and low-income Russian Federation, which left around half of the country’s contexts (36). Nutritional programmes in Bangladesh, pensioners without benefits for more than six months, China, Colombia, Mexico and the United States resulted were 5% more likely to die in the two years following in positive outcomes, such as increases in the weight and the crisis (32). With regard to unemployment insurance, height of participant children, and largely lowered rates the states with higher benefits in the United States have of anaemia and iron deficiency (94% reduction in the significantly lower cardiovascular disease incidence rates case of the Bangladesh programmes) (37–44). Several (33). In addition, more generous parental leave systems nutritional supplementation programmes in Bangladesh in Europe have been found to reduce deaths among and Guatemala also showed positive results not only in infants and young children (34). terms of children’s growth and diet, but also with regard Targeted programmes, mostly conditional cash transfers, to cognitive, educational and labour market outcomes generally show positive direct impacts on health outcomes later in life (45–52).

74 Chapter 5. Can social protection act as health policy?

Scarcely evaluated breastfeeding promotion information or developmental outcomes of children, especially regarding incentive-based programmes are effective in increasing health. Studies indicate that women’s return to work this practice. A recent comprehensive review of studies in the first year after birth can have a negative impact on the effect of different interventions aimed at promoting on children’s cognitive development, school readiness breastfeeding found that health education and peer and thus reading and mathematics abilities at 5 and support can result in improvements in the number of 6 years of age (74, 75). In Guatemala and Haiti, maternal women beginning to breastfeed (53). This has been employment was associated with lower nutritional status attributed to the fact that these kinds of programmes for children under 1, but superior nutritional status for entail a relevant cultural component. Two interventions children aged 1 to 2 (75). However, other research on in Scotland (Feeding Support Team, breastfeeding peer the effects of parental leave extension suggest that it coaching in rural areas) showed a positive effect on the does not have a direct significant impact on children’s number of women who breastfed (54, 55), while a third health outcomes, although it does have an influence on one (breastfeeding groups in deprived areas) did not prove the time that the mothers stay away from work and thus to be effective (46). Company-based interventions in the the time that they breastfeed and dedicate to seeking United States helped increase the breastfeeding period immunizations (76). for participant women (56, 57). Evidence on the health effects of social protection is Resource- and incentive-based disease prevention and particularly convincing for resource- and incentive- prenatal care type 1 interventions can help counteract based cash transfer programmes. The South African early child health impairments, especially in developing Child Support Grant, a cash transfer and means-tested contexts. Evaluations of specific prenatal interventions programme targeting poor women with no conditions across countries, including Argentina, India, Somalia, attached, had large significant nutritional effects on Ukraine, the United States and Zambia, suggest that the height of children that stayed in the programme for this kind of programme can have positive effects for the over 18 months (77). The programme also increased health of both mothers and children (37, 39, 40, 58–65). prenatal and postnatal visits to health care facilities by Evaluations of the United States Supplemental Program 65% and reduced home births (78). In Malawi, cash for Women, Infants and Children (WIC) concluded that transfers to adolescent girls increased school attendance the intervention helped raise average birth weight (37, and decreased early marriage, pregnancy, self-reported 39, 40, 63). In Bolivia, Guatemala, Indonesia and Nigeria sexual activity and HIV prevalence among beneficiaries maternal mortality and perinatal mortality declined as over one year (79). a result of programmes that provided better equipped health centres and trained nurses and midwives (66). Transfer programmes that do not specifically aim at improving children’s health outcomes also show positive Information-based type 2 parenting programmes aimed at health-related effects. Egypt’s Social Fund for Development, improving parental care skills before and after birth can targeted at the poor, reduced annual household spending improve children’s developmental outcomes. Although a on health by 18% and lowered the under-5 mortality rate recent review of studies on these programmes concluded by 6 per 1000; however, education and sanitation spending that their effects remain largely unknown (67), the benefited wealthier villages more than poorer ones (80). assessment of impacts of specific parenting programmes Juntos, an income transfer and service programme in suggests that parents do improve their child-rearing and Peru that aims to improve human development, resulted child stimulation techniques as a result, which in turn in a 61% increase in immunizations among children leads to improved cognitive, language, motor, social and aged 1–5 years (81). The South African Old Age Grant other skills for children, and evidence indicates that they was associated with improved school attainment among can have positive effects for mothers, such as reduced boys, with a significant impact among girls (82). Duflo maternal depression rates ( ). 16, 36, 68–73 (13) found that children in households with one member Incentive- and resource-based parental leave type 3 receiving a pension have better height-for-age and interventions show some potential to improve early weight-for-age indicators. The Nepal Poverty Alleviation

75 Fund showed statistically significant causal benefits in and in-facility births, especially in low-income states, terms of key welfare outcomes, including consumption, and reduced perinatal and neonatal deaths by 3.7 and food insecurity and school enrolment (83). 2.3 per 1000 respectively (59). The effects of conditional cash transfers such as Progresa/ Conditional cash transfer programmes also entail other Oportunidades in Mexico have been particularly well benefits. Most conditional cash transfers that have been researched. In the case of Progresa, around 70% of the evaluated to date are found to have large positive effects income transfer was used for increasing food quantity on school enrolment, by between 2% and 13%, although and quality (84, 85), which reduced the probability of not performance (93, 97–105). Some programmes, such stunting and increased the annual mean growth rate by as Oportunidades, appeared to increase school enrolment 16% for children (86–89). Additionally, the programme even among children who were ineligible for transfers, significantly raised the utilization of public health clinics probably as a result of peer effects (106). This educational for preventive care and lowered the number of inpatient impact could in turn translate into improvements in future hospitalizations (88). As a result, the treatment group labour market outcomes (99). On the other hand, social experienced an almost 3% increase in their measles protection programmes can contribute to overcoming immunization rates (90). Overall, Progresa led to a problems related to imperfect credit markets, and allow 22% decrease in the probability of children younger higher risk uptake among beneficiaries (107–111). than 3 years of age having been ill in the past month Around 12% of Progresa beneficiaries invested some of ( ). The continuation of Progresa, the Oportunidades 91 their cash into productive activities (112), while Mexico’s programme, in turn demonstrated that an increase in Oportunidades programme improved consumption cash transfers was associated with higher height for age, and asset accumulation for participants, but also for lower prevalence of stunting, lower prevalence of being non-participants (113). overweight, and better motoric and cognitive development among children (92). Cash transfer programmes with health-related conditions 5.2 Equity-based rationales appear to be especially effective. The Red de Protección Social in Nicaragua, for instance, reduced stunting by 5.2.1 Equity aspects in social protection 6 points – an unprecedented decline in such a short Social protection is the main mechanism available period of time – and the proportion of underweight to governments for making growth pro-poor or more children aged 0–5 years, partly through increased inclusive. It allows the redistribution of some economic dietary diversity (93). Familias en Acción in Colombia development gains and helps ensure that shocks do in turn decreased the prevalence of diarrhoea in urban not reverse them. Extensive evidence from a range of areas (94) and resulted in an average weight increase impact evaluations shows that different types of social of 0.58 kilograms among newborns (35). Children’s protection interventions are successful at reducing the intake of protein and vegetables and the probability of depth and severity of poverty and income inequality (109). adequate vaccination increased considerably (95). Fernald For instance, social transfers other than pensions are and Hidrobo (96) found that rural infants and toddlers found to reduce poverty risks by between 19% and 50% benefiting from the Ecuador Bono de Desarrollo Humano across EU-27 countries (114). had significantly greater vocabularies and were more likely to have received vitamin A or iron supplementation. Social protection can also help break the intergenerational Bolsa Família in Brazil was found to increase gestation transmission of poverty and inequality. There is periods, body mass index, immunization rates and school some evidence that the link between socioeconomic attendance among children. Janani Suraksha Yojana in disadvantage and children’s emotional, intellectual and India, the largest conditional cash transfer programme behavioural development functioning is mediated by in the world in terms of the number of beneficiaries parenting (115–117). Improvements in mother’s education being reached, significantly increased antenatal care and income in the year of birth and the year before birth

76 Chapter 5. Can social protection act as health policy?

seem to limit the degree to which child health is affected measures of poverty during the devaluation of the by family circumstance in developing countries (118). Jamaican dollar in the early 1990s, and households with Maternal education is a key aspect for the reduction of elderly members and young children benefited most from social and health inequalities. A study from Mexico, for the programme (136). In Brazil the combination of the instance, indicates that health care access, proxied by continuous cash benefit – a means-tested pension and breastfeeding and vaccinations, has significant positive disability grant – and the Bolsa Família contributed an effects on children’s cognitive outcomes and that it is estimated 28% of the fall in the Gini coefficient between positively affected by maternal education (119). The positive 1995 and 2004 (137). Bolsa Família in Brazil resulted effects of breastfeeding on children’s development and in turn in a 16% fall in income inequality and a 33% fall on adult outcomes such as obesity and other health in extreme poverty between 1999 and 2009 (138–140). conditions have been widely documented (22–26, 120). Conditional cash transfers have generally been found to Other studies have found persistent adverse effects of be more effective among households that are poorer or first-year maternal employment on breastfeeding and on more vulnerable at baseline. The Japan Fund for Poverty measures of children’s cognitive development (34, 75, Reduction programme in Cambodia had a 50 percentage 120–126), particularly in the case of mothers with lower point higher impact on enrolment for girls in the poorest education (127). two deciles of a composite measure of socioeconomic status, compared to a 15 percentage point difference for 5.2.2 Equity impacts of interventions girls in the richest two deciles (101). Oportunidades in Interventions targeted at children and parents can help Mexico also showed larger effects for children with the reduce inequities. Many of the nutritional interventions lowest propensities to enrol in school at baseline, and evaluated to date have been shown to be effective in only significant growth-related effects for children from improving the situation of children from disadvantaged households with below-median socioeconomic status backgrounds. Even when that is not the case, higher (89, 99). The Bono de Desarrollo Humano programme returns are observed for more vulnerable communities in Ecuador showed larger positive effects for the poorest or groups (128). The United States WIC programme, for children, who displayed improved cognitive outcomes, instance, showed a higher effect in the case of children less behavioural problems, higher haemoglobin levels born to women with lower levels of education or generally and better motor control, and higher school enrolment disadvantaged women (40). Other interventions have (141, 142). a more significant impact on particularly vulnerable groups or localities, such as Brazil’s Family Health Programme, the measles vaccination programme in 5.3 Value for money Bangladesh or the Honduras Atención Integral a la Niñez Despite the increasingly large body of evidence on the Comunitaria (129–131). A review of different parenting positive impacts of social protection programmes, evidence programmes concluded that home visits entail benefits of the value for money of this kind of interventions to families through changes in maternal parenting remains scarce. The cost–effectiveness of social transfer practices, the quality of the home environment and programmes is extremely challenging to determine, children’s development, especially for low-income, first- partly because full costs are difficult to obtain and partly time adolescent mothers (132). because impacts (effectiveness) are difficult to attribute Cash transfer schemes appear to have successfully and to quantify (143). A simulation exercise on the impact reduced poverty and inequality throughout developing of alternative cash transfer programmes on school countries (133, 134). Oportunidades in Mexico reduced attendance and poverty among Sri Lankan children, for the poverty headcount ratio by 10% and the poverty gap instance, found that cash transfer programmes targeting by 30% (135). Social pensions and transfers in South poor children would be the most cost-effective way to Africa translated into a 47% decline in the poverty gap reduce child poverty and encourage school attendance (12). The Jamaica Food Stamp Programme also affected (144).

77 Regardless of the difficulties entailed in such effort, cost offsets (153). Different evaluations of parenting some studies have tried to assess the potential returns programmes also showed positive benefit-to-cost ratios, of insurance-based interventions. It has been estimated such as the home-visiting Nurse-Family Partnership in the that the costs of providing maternity leave coverage and United States (see table 5.1). Vaccination programmes early child care for a year are compensated by income tax (frequently delivered through schools) appear to be one revenue raised when mothers continue employment (145). of society’s best potential health care investments, as they generally show much higher societal benefits than However, comprehensive studies that evaluate the value costs ( ). for money of interventions barely exist, and most of them 154–156 have focused on safety nets. One such analysis is provided The adequate financing of social protection programmes for the Colombian conditional cash transfer programme remains a key challenge. Decisions regarding the suitability Familias en Acción, which estimated a ratio of benefits and affordability of social protection instruments need to costs of 1.59 (146). The benefit-to-cost ratio of the to be informed by the assessment of potential impacts comprehensive Challenging the Frontiers of Poverty in each country context, and in the framework of overall Reduction programme in Bangladesh was estimated to social policy and budgetary decision-making (29, 157). range between 3.12 and 6.23 (147). The internal rate Both fiscal and political space is required to introduce of return of the conditional cash transfer programme and sustain national cash transfer programmes. Political Progresa has also been estimated to range between 8% legitimacy for these interventions needs to be secured, as and 17% (112, 148). The increase in economic activity they normally target vulnerable groups that are not well caused by the Dowa Emergency Cash Transfer project represented among the establishment and entail high was estimated to be well over twice their value (149). operational and administrative costs. The fiscal space The Procampo intervention in Mexico, introduced to for programme development is evidently more limited in compensate farmers for the anticipated negative effect developing countries, especially in low-income countries. of the North American Free Trade Agreement on the price Hence, while cash transfers have proved affordable in of basic crops, was found to have an indirect multiplier middle-income countries, the financing of an adequate effect (through multiplication of the liquidity received) level and coverage of cash transfers remains a major ranging from 1.5 to 2.6 (150). challenge in low-income contexts (27). Social protection programmes targeted at young children Potential trade-offs between targeted and universal and their parents have commonly shown net benefits. transfers are to be considered, both in economic Cost–benefit analysis suggests that $1 invested in and political terms. Investing in improving the human an early childhood nutrition programme in developing development conditions of particular groups may be done countries could potentially give at least $3 return in terms at the expense of creating structural protection systems of academic achievement (21). According to a recent that can help improve overall population outcomes, and the study, targeted interventions could result in higher cost relative costs of each option may differ depending on the savings than population-based interventions for young specific context. The focus of social policy has shifted from children (aged 0–6 years), whereas a population-based universal policies towards means testing and targeting approach could yield greater economic net benefits for over recent years, especially in developing countries, adolescents (aged 13–18 years) (151). It is estimated that where the choice has been limited by macroeconomic the United States WIC programme would save $1 billion and aid policies. However, the experience in high- and in federal, state, local, and private payer expenditures middle-income countries is that universal access is (152). Cost–effectiveness estimates of home visiting important for ensuring support by the middle class to programmes to avoid children maltreatment ranged finance welfare programmes, while most studies seem from $22 000 per case of maltreatment prevented to to show that solely targeting the poor involves high several millions. Seven of the 22 programmes of at least administrative costs and requires capacity that often adequate quality were cost saving when including lifetime does not exist in developing countries (158).

78 Chapter 5. Can social protection act as health policy?

5.4 Conclusions by their socioeconomic status, and therefore the lack of access to such protection can potentially be transmitted Social protection interventions are justified from an throughout generations. Most of the interventions efficiency perspective. The presence of market failures included and assessed to date appear to benefit the such as imperfect information concerning the benefits poor disproportionately, again especially in the case of of investments in human development, lack of access safety nets. to efficient insurance markets that can help households Value for money assessments of social protection protect from risk, or the externalities related to the social programmes can be strengthened in several ways. gains from a better-prepared and able labour force or There is some evidence of the net benefits offered from the productive investments that require a minimum by, for instance, early child development programmes level of financial security, are some of the factors that or some cash transfer interventions, although the provide grounds for the public provision of social and cost–benefits of insurance-based and especially universal health insurance and safety nets. protection mechanisms remains more challenging. The The efficiency- and health-related impacts of such financing of social protection and the potential trade-offs interventions are clearly demonstrated by the existing between universal and targeted mechanisms are key empirical evidence. This is particularly the case for political questions that should be carefully considered targeted conditional cash transfers in middle-income and evaluated also from the social determinants of health and some low-income countries, which have been perspective, which suggests using a combination of the more systematically evaluated, or for some early child two approaches. development programmes. Evidence on the effects of The strengthening of the collaboration between the health universal social protection instruments is, however, more and social protection sectors, where such collaboration limited, partly due to the associated methodological does not already exist, would be recommended in light of difficulties. the existing evidence. The improvement of health outcomes Equity concerns additionally explain the need for public is often a major objective of social protection institutions. efforts in the field of social protection. Social protection Stronger cooperation would therefore probably lead to is the main mechanism available to governments for the improved results for both sectors. This is particularly redistribution of economic growth gains. The financial true when approached from the social determinants of and insurance-related constraints that affect households health perspective, as a key goal of social protection is and individuals in their decisions are largely determined to diminish social inequities.

79 Twelve key points Efficiency-based rationales inclusive, as it allows the redistribution of economic • Investment in safety nets and social security systems development gains. has traditionally aimed to diminish the risk of • Social protection can help break the intergenerational catastrophic expenditures, especially for the poor, transmission of poverty and inequality. and to enhance the productive capabilities of the • Maternal education, for example with regard to poorest groups as they attain some level of financial breastfeeding and vaccination, is key to reducing stability. social and health inequalities. • Targeted programmes, mostly conditional cash • Interventions targeted at children and parents, transfers, generally show positive direct impacts on supported for example by home visits, can help health outcomes and on the social determinants of reduce inequities. health throughout the developing world. • Publicly funded health insurance programmes show • Social protection interventions aimed at improving especially positive effects for the most vulnerable the nutritional status of young children show positive populations. long-term outcomes. Value for money • Positive health impacts have been found in programmes aimed to improve breastfeeding • The cost–effectiveness of large-scale social transfer practices, prenatal care, parenting skills, child programmes is extremely challenging to determine, vaccination and timing of maternal employment. as full costs are difficult to obtain and impacts are difficult to attribute and quantify. • Cash transfer programmes with health-related conditions appear to be especially effective. • However, some studies have identified promising net benefits derived from insurance-based interventions, Equity-based rationales safety nets and social protection programmes • Social protection is a major mechanism by which targeting young children, though the adequate governments can make growth pro-poor and more financing of programmes remains a challenge.

80 Chapter 5. Can social protection act as health policy?

and

). Costs to 63

local, state, but it avoided alue for money V private expenditures Not assessed. over 18 years. amounted to $296 over $472 million in first-year Medicaid federal, expenditures ( estimated $1 billion in million, the federal government WIC would save an

Effect ). . ) 121

159 40, Equity aspects less than 10 years of education. children of mothers who case of children born to of education or generally unpaid leave without the reform ( Higher effect in the would take low levels of whose mothers have women with lower levels decline in high school drop-out rates for those disadvantaged women is especially large for 5.2 percentage point (

eak . ) W

121 rates. Other effects attendance ( Not assessed. decline in high school drop-out impact on college 2.7 percentage point

economic and equity impacts

39, 37, reduced

). y of health, 152 y low birth weight (by 63, Health effects Not identified. Higher average birth rate of births low and weight (by 2 g), ver 25% and 44%) ( 40,

y

y

ventions: summar

vention.

and nutrition infants and health care vention that months and mandator

Description provides supplemental below-5 children at based inter paid maternity leave Resource-based Reform in parental leave foods, unpaid maternity leave referrals, nutritional risk. entitlements from 3 to education for low- entitlements from 0 to Incentive- and resource- mothers, inter income pregnant women, increased mandator 4 12 months.

s

vention omen, vention – vention – vention

ype 3 ype 1 Inter able 5.1 Social protection inter United States High-income countries presence of control Parental leave Norway Program for W falls within the no evident health sector health sector’ Infants and inter inter inter Supplemental the Children (WIC) T T T

81

.

) .

)

the

the

165 For 166

each ).

-risk

vices, 132, lower 54

132, reduced -risk group, Savings occurred weeks (

alue for money V costs. assistance, and other ser and decreased criminal justice system providing proactive calls breastfeeding at spending for health overall benefit–cost ratio Benefits outweighed For the higher saving was $1.26 per revenues associated For the full sample, and £91 per additional use of public welfare with maternal employment, group in Elmira, was $2.88 ( was £87 per additional woman breastfeeding woman exclusively involvement. 6–8 $1 invested yielded $5.70 in savings. $1 invested ( through increased tax the lower The incremental cost of

).

s

). 164

. ) 161 132,

132 first-time children low-resource 132, , Equity aspects language and cognitive benefited from the programme ( benefits in children’ psychological resources of mothers with low achievement test scores at age 9 ( Low-income, families showed modest had higher grades and Not assessed. development ( In Denver In Memphis, mothers particularly

.

)

132,

162

vention

132, . ) only the but not in Elmira , 161 vention children ). 132, Other effects or Memphis ( among low-income cigarettes before the cognitive benefits ( child abuse and neglect at the time of Denver families who had received the inter home environment in Not assessed. different aspects of the whose mothers smoked In Elmira, experiment experienced inter Significant effects on ( 48% decline in rates of 15-year follow-up 163

. )

160 .

)

54

132, vention unmarried .

) children of One child in in Memphis, . , control women vention

161 compared with 132, Health effects low-income, also had lower child breastfeeding ( Nurse-visited families fewer accidents and and 17 inter some breast milk group had fewer emergency room visits died, In Elmira, mortality mothers in the treatment injuries required women compared with 12 were giving their baby women compared with were exclusively eight control women Similarly than controls ( treatment. the treatment group ( 22 inter 10 in the control group

. .

)

54

teaching , days after

and improving s second birthday . ) vention consisting vention consisting 132 Description by registered nurses, beginning prenatally and behaviours during pregnancy continuing through the child’ curriculum focuses on appropriate parenting skills, Partnership for ≤ 14 reactive telephone calls hospital discharge ( encouraging healthful developmentally Information-based Information-based inter in regular home visits inter in daily proactive and the maternal life course ( The Nurse-Family

s s

vention vention – vention vention – vention

ype 1/2 ype 1 Inter United States promotion control control Nurse-Family Partnership falls within the Breastfeeding health sector’ falls within the health sector’ inter inter inter inter Scotland the the T T

82 Chapter 5. Can social protection act as health policy?

). alue for money 146 V benefits to costs of 1.59 Estimated ratio of (

Equity aspects municipalities. in disadvantaged the poorest households The programme targeted

. ) 10.1 97 by 9.3% . ) and mostly on 97 Other effects attendance of children aged 12–17 in rural consumption, areas, and 6% depending on food ( enrolment between 2% Increased household Increases in school increase in school the age group. (5.2) percentage point (urban) areas ( (19.5%) in urban (rural)

.

)

95 . ) Increased 95 and 12-month- ), 94, 167 Health effects kilograms in one year of diarrhoea and 0.069 of being undernourished children under 2 years old ( average weight by 0.58 old boys grew 0.44 centimetres more ( Decreased prevalence Newborns increased decrease in probability in infants. intake of protein and immunization rates for vegetables and higher (

-old

and another vention that Description provides a nutritional children on the condition check-ups and are children 7–17 years old. subsidy of $15 per school attendance for Resource- and month for 0–6-year incentive-based inter that they attend growth vaccinated, transfer conditional on

vention

vention – iddle- and low-income countries ype 2 Inter M some Familias en health sector inter involvement of Colombia Acción

T

83

). 148 alue for money 112, V been estimated to range between 8% and 17% return of Progresa has ( The internal rate of

.

)

89

). ). 87,

.

135 ) 106 vention 170 Equity aspects poorest inter poverty headcount ratio by 10% and the poverty probably as a result of peer effects ( associated with better among the poorest and children ( appeared to increase children who were school enrolment among Progresa was Progresa reduced the households tended to be growth in height gap by 30% ( ineligible for transfers, younger infants ( taller than comparison Children living in the Oportunidades also

y

98,

).

. ) . 169 ) y school ( 112 99 . ) s motor and and had a 105 ), 92 Other effects participants ( beneficiaries invested cash into productive activities ( children’ cognitive development children making the attained an average of one fifth more of a year of schooling (around 2% average) ( and asset accumulation significant impact on school enrolment for for two more years for participants and non- higher future wages on It improved consumption transition from primar to secondar Children that received Oportunidades transfers Oportunidades improved ( 12% of Progresa 100,

.

)

88,

90

.

)

).

88 . 85 )

91 84,

-old children s measles . ) Health effects past month ( lower prevalence of and quality ( prevalence of being stunting of children and children’ of public health clinics and lower number of Reduced probability of overweight. for preventive care stunting and lower having been ill in the hospitalizations ( growth rate by 16% ( was associated with Increased utilization greater height for age, increasing food quantity increased annual mean immunization rates ( in the probability of 0–3-year transfer was used for that increasing transfers 3% increase in Overall 22% decrease Oportunidades showed 70% of the Progresa 168

All

. vention that vices and buy food to Description based inter provides a monthly parents bring children to preventive medical care provides an educational on condition that they attend at least 85% of the school year children receive regular stipend on condition that ser scholarship for children Resource- and-incentive medical check-ups. improve their nutrition. Oportunidades also

vention

vention – ype 2/3 Inter some Progresa / health sector Mexico inter involvement of Oportunidades T

84 Chapter 5. Can social protection act as health policy?

. )

aking T 171 associated the present rate. The

. alue for money V participated in the programme for three benefit–cost ratios are of the programme was a 10% (5%) increase cost of the programme For children who full years, respectively ( was $67.74 using a discount wages from 0.6 more discounted value of the in wages as an upper $23.25 per child $65.88 using a 6% $622–$261 ($312– $131). year the present discounted value of the increase in years of schooling is 9.19–3.96 (4.61–1.99) 3% discount rate and 3–6% discount rates, (lower) bound and The total annual cost Equity aspects Not assessed.

but only . ) . ) 48 49 . and a 0.25 ) ). 50 171 Other effects before age 3 years was progression; a 0.25 associated with higher attainment by women cognitive test scores speedier grade schooling of the average student by 0.6 years Exposure to atole Better achievement for for men ( for both women and fresco ( hourly wages, reading comprehension women exposed to atole Increased grade Increased years of men, increase in a test of increase on non-verbal than those exposed to (1.2 grades) and ( (

). 52 Health effects faster than children of fresco ( who received atole grew women who received Children of mothers

,

either

y medical care vention, Description protein-energy) or of supplementation of atole (enhanced and up to age 7 in four Resource- and Primar nutritional fresco (moderate energy no protein) prenatally was also provided. incentive-based inter through the provision villages in Guatemala.

s

vention vention – vention The table describes impacts from a non-exhaustive list of programmes with the aim covering examples different regions world and development or welfare contexts.

ype 1 Inter plementation of Central and children control Nutrition Panama falls within the nutritional sup- health sector’ Institute of mothers inter inter the Guatemala (INCAP) America and T Note:

85 in East Asia. National Bureau of Economic Research, 2008: References 321–345. 1. Attanasio O, Lechene V. Tests of income pooling in household 18. Calderon MC. High quality nutrition in childhood, body size and decisions. Review of Economic Dynamics, 2002, 5:720–748. wages in early adulthood: evidence from Guatemalan workers. 2. Doss C. The effects of intrahousehold property ownership on Economica (National University of La Plata), 2008, 54(1–2):41–86. expenditure patterns in Ghana. Journal of African Economies, 19. Case A, Paxson C. Causes and consequences of early-life health. 2006, 15(1):149–180. Demography, 2010, 47:65–85. 3. Hoddinott J, Haddad L. Does female income share influence 20. Glewwe P, Jacoby HG. An economic analysis of delayed primary household expenditures? Evidence from Côte d’Ivoire. Oxford school enrollment in a low-income country: the role of early , 1995, 57(1):77–96. Bulletin of Economics and Statistics childhood nutrition. 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89 124. Hawkins SS et al. The impact of maternal employment on breast- 139. V eras Soares F. Brazil’s Bolsa Família: a review – perspectives on feeding duration in the millennium cohort study. Public Health cash transfers. Economic and Political Weekly, 2011, XLVI:55–60. and Nutrition, 2007, 10:891–896. 140. Veras Soares F, Silva E. Conditional cash transfer programmes 125. Visness CM, Kennedy KI. Maternal employment and breast-feeding: and gender vulnerabilities in Latin America: case studies from findings from the 1988 national maternal and infant health study. Brazil, Chile and Colombia. London, Overseas Development American Journal of Public Health, 1997, 87:945–950. Institute, 2010. 126. Waldfogel J et al. The effects of early maternal employment on 141. Oosterbeek H et al. The impact of cash transfers on school child cognitive development. Demography, 2007, 39(2):369–392. enrollment: evidence from Ecuador. Policy Research Working Paper No. 4645. Washington, DC, World Bank, 2008. 127. V erropoulou G, Joshi H. Does mother’s employment conflict with child development? Multilevel analysis of British mothers born in 142. Schady N, Paxson C. Does money matter? The effects of cash 1958. Journal of Population Economics, 2009, 22(3):665–692. transfers on child health and development in rural Ecuador. Policy Research Working Paper No. 4226. Washington, DC, World Bank, 128. Galasso E, Yau J. Learning through monitoring : lessons from a 2007. large-scale nutrition program in Madagascar. Washington, DC, World Bank, 2006. 143. Devereux S, Coll-Black S. Review of evidence and evidence gaps on the effectiveness and impacts of DFID-supported pilot social 129. Koenig MA et al. Health interventions and health equity: the transfer schemes. Department for International Development, examples of measles vaccination in Bangladesh. Population 2007. and Development Review, 2001, 27(2):283–302. 144. Kumara AS, Pfau WD. 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The role of home-visiting programs in Programa Familias en Acción: subsidios condicionados de la red preventing child abuse and neglect. Preventing Child Maltreatment, de apoyo social. Bogota, National Planning Department, 2006. 2009, 19(2). 147. Sinha S et al. Cost-benefit analysis of CFPR. BRAC Research 133. Arnold C et al. Cash transfers literature review. London, Department and Evaluation Division and EDA Rural Systems, 2008. for International Development, 2011. 148. Coady D, Parker S. Cost-effectiveness analysis of demand- and 134. Social protection: accelerating the MDGs with equity. Social and supply-side education interventions: the case of PROGRESA in Economic Policy Working Brief. United Nations Children’s Fund, Mexico. Review of Development Economics, 2004, 8(3):440–451. 2010. 149. Devereux S et al. An evaluation of Concern Worldwide’s Dowa 135. Skoufias E, Parker SW. Conditional cash transfers and their impact Emergency Cash Transfer project (DECT) in Malawi, 2006/07. on child work and schooling. FCND Brief No. 123. Washington, DC, 2007. International Food Policy Research Institute, Food Consumption and Nutrition Division, 2011. 150. Sadoulet E et al. Cash transfer programs with income multipliers: PROCAMPO in Mexico. World Development, 2001, 29(6):1043– 136. Ezemenari K, Subbarao K. Jamaica’s Food Stamp Program: 1056. impacts on poverty and welfare. Policy Research Working Paper No. 2207. Washington, DC, World Bank, 1999. 151. Ma S, Frick KD. A simulation of affordability and effectiveness of childhood obesity interventions. Academic Pediatrics, 2011, 137. Soares F et al. Cash transfer programmes in Brazil: impacts 11(4):342–350. on inequality and poverty. Working Paper No. 21. International Poverty Center, 2006. 152. Bitler MP, Currie J. Does WIC work? The effects of WIC on pregnancy and birth outcomes. Journal of Policy Analysis and 138. Tapajós L et al. A importância da avaliação no contexto do Management, 2005, 24(1):73–91. Bolsa Família [The importance of evaluation in the context of Bolsa Família]. In: Castro JA, Modesto L, eds. Bolsa Família 153. Dalziel K, Segal L. Home visiting programmes for the prevention 2003–2010: avanços e desafi os [Bolsa Família 2003–2010: of child maltreatment: cost-effectiveness of 33 programmes. progress and challenges], Vol. 2. Brasilia, Instituto de Pesquisa Archives of Disease in Childhood, 2012, 97(9):787–798. Econômica Aplicada, 2010: Chapter 3.

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154. Banz K et al. The cost-effectiveness of routine childhood varicella 164. Olds D et al. Home visiting by paraprofessionals and by nurses: vaccination in Germany. Vaccine, 2003, 21(11–12):1256–1267. a randomized, controlled trial. Pediatrics, 2002, 110:486–496. 155. Hsu H-C et al. Cost-benefit analysis of routine childhood 165. Karoly LA et al. Investing in our children: what we know and vaccination against chickenpox in Taiwan: decision from different don’t know about the costs and benefits of early childhood perspectives. Journal of Public Economics, 2001, 81(3):345–368. interventions. Santa Monica, California, RAND Corporation, 1998. 156. Szucs T. Cost-benefits of vaccination programmes. Vaccine, 166. A os S et al. Benefits and costs of prevention and early intervention 2000, 18(Suppl. 1):49–51. programs for youth. Olympia, Washington State Institute for Public Policy, 2004. 157. Hickey S. Conceptualising the politics of social protection in Africa. Working Paper No. 4. University of Manchester, Brooks 167. Lagarde M et al. Conditional cash transfers for improving uptake World Poverty Institute, 2007. of health interventions in low- and middle-income countries: a systematic review. Journal of the American Medical Association, 158. Social protection: the role of cash transfers. United Nations 2007, 298(16):1900–1910. Development Programme, International Poverty Centre, 2006. 168. Behrman J, Hoddinott J. An evaluation of the impact of PROGRESA 159. Owen AL, Owen GM. Twenty years of WIC: a review of some effects on pre-school child height. Report submitted to PROGRESA. of the program. Journal of the American Dietetic Association, Washington, DC, International Food Policy Research Institute, 1997, 97:777–782. 2000. 160. Kitzman H et al. Impact of prenatal and infancy home visitation by 169. Barrientos A, Sabates-Wheeler R. Do transfers generate local nurses on pregnancy outcomes, childhood injuries, and repeated economy effects? Working Paper No. 106. University of Manchester, childbearing. Journal of the American Medical Association, 1997, Brooks World Poverty Institute, 2009. 278(8):644–652. 170. Leroy J et al. The Oportunidades program increases the linear 161. Olds D et al. Effects of nurse home visiting on maternal and child growth of children enrolled at young ages in urban Mexico. functioning: age 9 follow-up of a randomized trial. Pediatrics, Journal of Nutrition, 2008, 138(4):793–798. 2007, 120:e832–845. 171. D amon A, Glewwe P. 2007. Three proposals to improve education 162. Olds D et al. Does prenatal and infancy nurse home visitation in Latin America and the Caribbean: estimates of the costs and have enduring effects on qualities of parental caregiving and benefits of each strategy. University of Minnesota, Department child health at 25–50 months of life? Pediatrics, 1994, 93:89–97. of Applied Economics, 2007. 163. Olds D et al. Prevention of intellectual impairment in children of women who smoke cigarettes during pregnancy. Pediatrics, 1994, 93:228–233.

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Chapter 6. Can urban development, housing and transport policy act as health policy?

6.1 Efficiency-based rationales Additionally, there are potential externalities that must be accounted for with regard to urban development and 6.1.1 Benefits of urban development, housing. Direct externalities of housing and neighbourhood conditions generally relate to health. Poor housing, for housing and transport infrastructure instance, can encourage the spread of disease. As seen and the presence of market failures above, the benefits a family derives from living in a he potential individual benefits of adequate urban certain neighbourhood or house is affected by decisions infrastructure, including housing and transport, made by their neighbours. Therefore, only owners that T are large and evident. Urban development bears are confident that their neighbours will do the same in this sense relevant implications for the quality of life would have an incentive to invest in enhancing their and opportunities available to individuals through varied properties. Intergenerational externalities also arise, as aspects, from access to services and employment to, financial markets are also imperfect and because the for instance, the proximity of green areas. Adequate social discount rate is lower than the private rate, again housing availability is associated with multiple positive generally leading to underinvestments in both new outcomes for the individual related to health, education developments and improvements. and employment, which can have a determinant impact for long-life opportunities and income, while transport Different studies demonstrate the connection between is a clear facilitator for enhancing personal welfare (1). the housing sector and economic growth (4–6). There is However, the presence of “public goods” (in the economics evidence, for instance, that public housing significantly sense) prevents the urban development sector from contributes to local economies in the United States working efficiently. All decisions related to neighbourhoods both in a direct and in an indirect way. It has been entail a high level of uncertainty, given that urban estimated that direct spending by public housing development depends on a multitude of external factors authorities is approximately $8.1 billion a year, while this that individuals cannot control. In this sense, urban spending generates another $8.2 billion in indirect and development is affected by the fact that it usually relates to induced economic activity in the regional economies (7). “public goods”, including the environment, public spaces or For instance, every $1 spent on developing affordable services, for which no individual is to be held particularly housing appears to produce around $0.64 somewhere responsible but from which all residents can benefit. else in Iowa’s economy (8). In addition, public housing Inadequate information and resulting insecurity can rent subsidies help low-income workers obtain jobs actually be exacerbated by different types of discrimination and stay in otherwise unaffordable markets, therefore (2, 3). indirectly subsidizing employers (7). Imperfect information in the housing sector can lead to Externalities and the potential emergence of monopolies in inefficient outcomes. Accessing information on housing the transport sector provide grounds for public intervention prices and goods is still expensive, and can be particularly in the market. There is wide consensus in the literature, in challenging for some people, for instance new arrivals this regard, that the most relevant negative externalities in an area who are not familiar with the local housing concerning road transport are accidents, road damage, system or people who lack the necessary education. environmental damage, congestion and oil dependence Additionally, the housing market does not properly reflect (9). Additionally, transportation infrastructure can reduce the utility of investments, and therefore private owners pre-existing negative externalities, and generate large cannot readily realize their value or borrow to obtain the positive societal effects with regard to associated required finance. More generally, individuals tend to be outcomes, including industrial growth. On the other risk averse, which reduces the incentives to invest. At the hand, unrestrained competition in the sector, considering same time, housing supply inelasticity, which entails its peculiarities, could naturally lead to dominance by a that it would not increase in proportion to demand, can single company, which raises questions about the public lead to marked price rises in short periods of time (2, 3). interest of access, availability and price of transport.

93 The transport industry bears large economic, social and normally associated with the lack of safety equipment. safety implications. Transport supply in current times is a Lead poisoning is the most common cause of environmental major industry, employer and consumer of raw materials, disease in children (22), and entails irreversible effects and a key component of national output (1). Efficient that include reduced IQ, impaired growth and neurological transport systems entail substantive economic and development, and behaviour problems (23–25). Among social opportunities and can result in positive multiplier adolescents, lead poisoning has been associated with effects, including access to markets or employment antisocial behaviours such as bullying, vandalism, arson and additional investments. At the macroeconomic level and shoplifting (23, 26). Lack of smoke alarms, fire transportation and the mobility it generates account for a extinguishers and sprinklers may exacerbate the risk of large share of production. For instance, in many developed injury from fire (18). countries, transportation accounts for between 6% and Housing tenure additionally appears to have an impact on 12% of GDP. At the microeconomic level, it is linked to children’s health outcomes. School-age children whose producer, consumer and production costs. It is normally parents own their homes are less likely to exhibit behaviour assumed that investments in transport are in fact wealth problems (27), while for young adolescents, living in a generating rather than wealth consuming, although this rented home has been associated with a higher likelihood is not always the case. of psychological distress (28) and having a child before age 18 (5). In countries such as the Netherlands and 6.1.2 Does urban development and the United Kingdom, housing tenure actually appears to infrastructure have an impact on health? mediate the relationship between education or income The physical environment where people live can have and health (29). High housing costs can prevent families relevant impacts on their well-being, and particularly from meeting other basic needs (30), which could in turn on health. There is growing consensus today on the lead to heightened health or psychosocial problems (17, implications of the urban environment, including transport, 31, 32). On the other hand, lower levels of behavioural infrastructure provision and basic services, for people’s and emotional problems have been found among children health and healthy behaviours, and therefore for health in families with higher-cost residences (22, 33). inequities (10–14). Factors such as overcrowding, A range of research evidence suggests that the availability dampness, area reputation, neighbourliness, fear of crime of green spaces has a significant influence on health (34). and area satisfaction appear to be important predictors The physical features of the neighbourhood (including the of self-reported health (15). Reviews of evidence on lack of resources and green spaces), disorder and violence these connections highlight three main pathways: area can operate as stressors (35). Urban environments that characteristics, internal housing conditions and housing lack public gathering places can encourage sedentary tenure (16–18). living habits, while the availability of attractive parks Internal housing characteristics can have relevant effects and open spaces can facilitate opportunities for exercise for health outcomes, especially for children. Housing (36, 37). The built environment affects physical activity, conditions, including temperature and humidity, can through for example cycling and walking (38–41). generate or aggravate respiratory health problems. In fact the chances of being physically active may be up Children’s physical health particularly depends on the to three times higher in environments with green areas, characteristics of the home in which they live (19). while the likelihood of being overweight or obese may Overcrowding, for instance, has been linked with symptoms be around 40% lower (42). Parks and civic spaces also of psychological problems or worsening academic increase the potential for social interaction and community achievement regardless of a family’s socioeconomic activities (43). status (20, 21), with effects that can persist throughout Similarly, transport-related aspects are often cited as a life, affecting future opportunities and well-being (21). major influence on health in the literature. WHO estimates Child poisoning, as an example, is often related to lead that road traffic injuries account for 1.3 million deaths piping, paint or carbon monoxide, while injuries are annually, and are the leading cause of death worldwide

94 Chapter 6. Can urban development, housing and transport policy act as health policy?

among people aged 15–29, and the second for those although detailed evaluations of the economic benefits aged 5–14. In particular, road accidents are one of the of improved cookstove interventions barely exist to date. leading causes of years of life lost in most European An improved stove intervention in Nepal was found to cities (12). Road traffic represents a particular threat to reduce the average indoor air pollution level (53). children, which can be increased by the lack of safe play Resource- and incentive-based type 2 interventions spaces, pavements and crossings, high traffic volume and to improve the internal housing conditions are found speeds over 40 kilometres per hour, and a high density to be especially beneficial for children. It is estimated of kerbside parking ( ). 44 that recent declines in the incidence of elevated blood lead levels in United States children may be partially 6.1.3 Average impact of interventions due to public funds provided for lead control in private Programmes aimed at improving internal housing low-income housing (54). A significant decrease in conditions show positive effects for health. A review of lead dust was observed in houses where windows were studies on the health effects of environmental changes replaced (55). Improving housing conditions through in the United Kingdom confirmed that many of the the Healthy Housing programme in New Zealand, for interventions to improve internal housing conditions instance, led to an 11% decrease in post-intervention entailed positive effects with regard to general and hospital admissions for children up to 4 years old (56). mental health outcomes (45). Overall, warmth and energy Piso Firme in Mexico, which promoted a shift from dirt efficiency interventions seemed to have the clearest to concrete cement flooring, also significantly improved positive health impacts. Interventions that reported child health, with decreases in the incidence of parasitic the largest effects were targeted at vulnerable groups, infestations and diarrhoea, and the prevalence of anaemia. including those with existing health conditions and the The programme had a similar absolute impact on child elderly (17). Another review of studies on interventions cognitive development to Mexico’s conditional cash aimed at tackling a variety of housing-to-health pathways transfer programme Oportunidades. Additionally, adults in the United States concluded that most studies reported were found to be happier, as measured by their degree a significant improvement in health (46). of satisfaction with their housing and quality of life, and lower depression and stress rates ( ). Basic housing enhancements are associated with 57 improvements in health outcomes. Environmental changes Incentive-based type 2 transport programmes aimed at in the housing infrastructure to reduce risk of falls are for reducing or calming traffic seem to be generally effective instance found to reduce fall-related injuries significantly in the prevention of traffic accidents and of pollutant (between 6% and 30%) (47). Having working smoke emissions. Two reviews of studies of such interventions alarms installed in the home reduces death and injuries in Australia, Denmark, Germany, Japan, the Netherlands, from residential fires (48–51). Homes with smoke alarms Spain and the United Kingdom concluded that areawide have a 40–50% lower fire death rate compared to homes traffic calming measures can reduce the risk of road without smoke alarms (48). Insulation, as shown by the traffic injuries by between 11% and 15% on average, experience in New Zealand, can improve the occupants’ and eventually deaths, although this association was less health and well-being as well as household energy clear (58, 59). The implementation of 20 miles per hour efficiency (52). (mph) zones in London, as an example, was estimated to reduce casualties by 42–45% for all road users, and Improved cookstove interventions show potential to fatalities (killed or seriously ill) by between 46% and 54% decrease the burden of disease that the exposure to ( ). However, further rigorous evaluations of such emissions entails in developing countries. Half of the 60, 61 interventions are needed ( ). world population, especially in developing countries, uses 62 solid fuels and traditional stoves or open fires for cooking, Speed limit regulation has proven to be generally lighting or heating, with very significant health as well as successful in decreasing the number of accidents and climate change impacts. Improved cookstoves have been related casualties. Different studies analysing the effects disseminated as an alternative to reduce these impacts, of the 1995 national maximum speed limit repeal in the

95 United States found increases in road fatalities ranging Evidence from different countries suggests that from 3.2% to 37% on rural interstate highways (63, 64), incentive-based measures to promote alternative transport and a 39.8% and 25.4% increase in serious and moderate modes can generate health gains. Each additional hour injuries respectively (65). Most analyses of the effects spent in a car per day has been associated with a of the repeal in specific states (Alabama, New Mexico, 6% increase in the likelihood of obesity in the United Utah, Washington) also found significant increases in States, while each additional kilometre walked per day total crashes and deaths, normally for the first year after was associated with a 4.8% reduction in the likelihood of the intervention (66–69). However, evidence from New obesity (80). A study in Los Angeles found in this regard York shows that the increase in speed limits from 55 to that residents living in areas in a traditional grid system 65 mph was followed by a 28.3% decrease in absolute were up to 25% more likely to walk to work compared with mortality (70). residents in socioeconomically similar areas that were laid out specifically for cars ( ). A review of interventions in Alternative traffic calming interventions similarly appear 12 Germany, the Netherlands, Norway, the United Kingdom to reduce casualties and fatalities in road traffic accidents. and the United States found that overall, commuter In a review of impact of speed cameras in high-income subsidies and alternative provision (for example a new countries, most studies reported a reduction in road train station) had the strongest impact on modal shift traffic collisions and casualties, with the reduction in (1% and 5% respectively) ( ). The promotion of alternative the vicinity of the camera ranging from 5% to 69% for 81 transport modes also offers potential to decrease the collisions, 12% to 65% for injuries, and 17% to 71% number of vehicular traffic fatalities and casualties. for deaths (71). Comparable results were reported by Different interventions in the city of Bogota, in Colombia, a more recent review of similar interventions, with the aimed at improving public transport led to a 50% decline reductions ranging from 8% to 49% for all crashes in in traffic fatalities (82). the vicinity of camera sites (72). A review of studies from Australia, Singapore and the United States also reported Many of these interventions entail a change in cultural that red-light cameras are effective in reducing total values and social norms. This is particularly the case casualty crashes (73). A review of studies on the impact in developing countries and with regard to habits and of street lighting suggests that it may prevent road traffic behaviours that can be harmful for health, such as those crashes, although further well-designed studies are related to water and sanitation, or physical infrastructure needed to determine their effectiveness, particularly in of housing, including the use of traditional cookstoves middle- and low-income countries (74). or dirt floors. Different interventions aimed at calming traffic, prompting a shift in transportation modes, or Other type 2 incentive-based policies show potential increasing the access to green and gathering areas to reduce traffic accidents. Motorcycle helmets, for across higher-income countries also involve a cultural instance, are systematically found to reduce the risk transition, necessary to promote healthier behaviours. of death and head injury in motorcyclists (75). All Measures that intend to raise awareness and change interventions for promoting the use of booster seats perceptions and behaviours in connection with among 4–8-year-olds have demonstrated a positive safety-related issues in the house environment and effect, although most evidence is based on uncontrolled with regard to transport, including those related to lead studies (76). Legislation on the use of bicycle helmets control in windows or piping, the use of fire alarms, additionally appears to be effective in increasing helmet or practices for obtaining driving licences and use of use and decreasing head injury rates, as well as seatbelts and helmets, also enter the normative and non-legislative interventions such as the provision of cultural terrain. free helmets (77). Evidence in this regard remains particularly scarce in low-income countries (78). Despite the potential of visibility aids to help detect pedestrians and cyclists, their effect remains largely unknown (79).

96 Chapter 6. Can urban development, housing and transport policy act as health policy?

6.2 Equity-based rationales (98). Residents in urban social housing who had views of trees and open spaces demonstrated a greater capacity 6.2.1 Equity aspects in urban to cope with stress (99). Access to green space also has a substantial positive effect on physical health for those development, housing and transport from low-income groups (98). Children’s participation in Urban development, housing and transport are key physical activity is also positively associated with publicly determinants not only of current well-being but also of provided recreational and transport infrastructure (100). lifelong opportunities. As seen in previous sections, the Income inequalities also seem to mediate the connection physical environment where individuals live has significant between transport and health inequities. High traffic volume, implications, mediated by health, education, employment and therefore higher pollution levels and risk of road traffic or safety outcomes, for their present well-being. At the accidents, are particularly common in disadvantaged areas same time, conditions such as poor housing, overcrowding, (101). In the United Kingdom, children in the poorest families lack of basic services or inadequate infrastructures can are four times more likely to be involved in traffic accidents affect the future prospects of millions of people throughout than children from the wealthiest families. In the United the world. It is widely accepted that a minimum standard States, drivers from low-income areas register higher of accommodation is a basic need, while the availability accident rates than those from rich areas (102). The lack of adequate transport is also generally considered a of access to adequate transport disproportionately affects necessity of life (2). However, families often do not have the older and disabled people, and those with low socioeconomic purchasing power to afford good-quality accommodation, status, who in turn may have limited access to services neighbourhoods and transport, which will in turn deprive such as shops and health care (103). They are likely to their children of the social and economic opportunities be especially vulnerable in environments dominated by that they entail. In this sense, it has been found that private car use (104). inequalities in unobserved community-level aspects help explain a larger share of self-rated health inequalities than Given its high dependence on socioeconomic circumstances, the physical environment can help perpetuate individual-level characteristics (83). intergenerational inequalities with regard to health. It has In fact, the association between housing and neighbourhood been widely demonstrated that factors such as the quality conditions and health inequities appears to be largely of the environment where they live, and the interactions mediated by income. Living in extreme-poverty with other people, strongly affect children’s development neighbourhoods or with deteriorating physical features can (105), as families and their residences modulate children’s have a negative effect on health outcomes, as measured behaviour and access to experiences and opportunities by mortality, child and adult physical and mental health, (106). Children who live in “unsafe” neighbourhoods may be and on health behaviours, mainly through reductions in exposed to greater risks of developing problem behaviours, physical activity, increased anxiety and social disorder including hyperactivity, aggression or withdrawal. Children (84–92). People living in the most deprived areas of the who appear to be at a high risk for lead poisoning include United Kingdom and the United States, as an example, were those living in poor families, in inexpensive housing, or in found to have the highest illness ratios, were more likely to rented or older homes, or those in communities with high report depression and had a higher incidence of coronary rates of poverty or low ownership rates of residences (22, 33). heart disease (93–95). Mixed-income neighbourhoods Neighbourhoods can be resource rich or resource poor, and in turn are linked to health benefits for disadvantaged thus can deter or boost the well-being of children (107– groups (96, 97). 110). Children living in socioeconomically disadvantaged Specific neighbourhood conditions, such as the availability neighbourhoods are more likely to experience mental of green areas or traffic, can bear relevant health equity health and emotional problems, and adolescents may be effects. Evidence suggests in this sense that populations more likely to use drugs, engage in delinquent behaviour, exposed to the greenest environments show the lowest have sexual intercourse and become pregnant (110–112). levels of health inequality related to income deprivation School readiness, high school graduation rates, educational

97 achievement and even later annual earnings tend to be the Yonkers and the Cincinnati interventions19) were found higher in socioeconomically advantaged neighbourhoods to improve reported overall health, distress and anxiety, (113–117). A comparative study using data from depression, problem drinking, substance abuse and 22 European and North American countries found that exposure to violence (16, 125). The Housing Allowance students from countries with the highest area deprivation Experiment and Housing and Urban Development reported poorer health than students in the least deprived programmes were also found to improve self-reported countries (118). health (125). On the other hand, the United States HOPE VI programme did not show any positive significant These challenges are particularly evident in developing effects, since in the short term families were not generally contexts. Many poor and marginalized groups live in able to rebuild their local social networks (126). slums and informal settlements in developing countries, where they are vulnerable to diverse health threats, In particular, the Moving to Opportunity and which particularly affect children. For example, primary Section 8 interventions provided evidence of the school attendance rates in Delhi, India, are much lower benefits that assisted private rental housing programmes among children living in slums (54.5% compared with can entail. Both interventions subsidized rental housing 90% for the city as a whole, according to data from costs for families with income below 50% of the area 2004–2005) (119). In Bangladesh, the differences were median. Moving to Opportunity participants had to even starker at the secondary level (18% of children in relocate to a lower-poverty neighbourhood, while slums attended secondary school, compared with 53% in Section 8 beneficiaries were offered a geographically urban areas as a whole and 48% in rural areas, according to unrestricted voucher (17). Section 8 children were 2009 data) (120). While enrolment improved in the rural and significantly less likely to experience growth impairment non-slum urban areas of the United Republic of Tanzania, related to malnutrition (127). Families that moved to low- Zambia and Zimbabwe in the late 1990s, it worsened in poverty areas in general experienced improved outcomes urban slums (121). in health and a reduction in problem behaviours for boys (128–130). Additionally, children and adolescents 6.2.2 Equity impacts of interventions participating in the Moving to Opportunity programme in New York and Boston showed improved health and Resource-based type 3 public housing provision interventions social outcomes, although the effects were mediated by can entail multiple benefits for vulnerable families, especially gender in the case of health behaviours, with females for children. Children in public housing projects may be less especially benefiting (16, 131). likely to lag behind other children (122) and more likely However, evidence from other programmes aimed at to achieve equivalent levels of education (123), and their providing affordable accommodation to vulnerable groups families may experience fewer housing problems, such as is not so clearly positive. For instance, in the case of overcrowding (122, 124), severe cost burden or low-quality the Progressive Housing Programme implemented in housing (124). Privately owned assisted housing, however, Chile in 1991, the average income of the groups that appears to be less distressing than public housing (123). benefited from subsidized construction was higher Assisted housing interventions aimed at moving vulnerable than the average income of non-beneficiaries for every families out of environments of concentrated poverty show quintile, and although the programme positively affected relevant effects on health. Several residential mobility material conditions such as access to water, sewerage programmes in the United States (Moving to Opportunity, and electricity, it had a negative effect on overcrowding, the Section 8 and the Gautreaux housing project,18 and had no clear effects on other outcomes (for example poverty, school attendance, occupation ratio) (132). 18 All programmes used various combinations of Section 8 vouchers Targeted schemes, through which people with severe alone or plus counselling to allow families to move to private rented accommodation in more affluent areas. The Gatroux intervention, mental illness are located in one site with assistance specifically, provided support to families to pay for private rental apartments in mixed neighbourhoods (less than 30% African-American). 19 Which involved building new public housing units in low-poverty areas.

98 Chapter 6. Can urban development, housing and transport policy act as health policy?

from professional workers, have potential for great (141). A review and meta-analysis of water, sanitation and benefit, although at the risk of increasing dependence hygiene interventions to reduce diarrhoea, for instance on professionals and prolonging exclusion from the through interventions such as the Water and Sanitation community (133). An Australian housing programme Extension Programme in Pakistan, found in this sense for indigenous people was found to have a significant that most types of interventions had a similar impact, impact on housing infrastructure but not on crowding reducing diarrhoea by between 25% and 37% (142). or hygiene ( ). On the other hand, a study of rental 134 Specific interventions aimed at improving slum conditions assistance for homeless and unstably housed persons show a variety of positive effects. Parivartan, a slum living with HIV in Baltimore, Chicago and Los Angeles upgrading initiative in Ahmedabad (India), improved found favourable associations of housing with HIV viral environmental sanitation conditions and health and load, emergency room use and perceived stress (135). reduced absence from work due to illness (143). Regarding general urban development and transport The Orangi Pilot Project in Karachi (Pakistan), which interventions in high-income countries, the existing tested innovative methods to provide adequate low- and scarce evidence of their equity impacts provides cost sanitation, health and housing facilities, resulted mixed results. Area-level interventions may be more in improved environmental sanitation and a reduction in cost-effective than moving individuals to better areas, diseases. The Community-Led Total Sanitation Programme, and may benefit the community as a whole (17, which entails an innovative methodology for mobilizing 136–138). However, a review of the health impacts of communities to completely eliminate open defecation urban regeneration programmes found a high variability in Kalyani (India), reduced the incidence of waterborne in health-related effects, with some studies reporting diseases, gastroenteritis, stomach ailments and worm improvements (in mortality) and others finding worsening infestations, and improved control of the spread of polio. outcomes (in self-reported health) (14). The potential of As a result of a community-managed toilet model in urban regeneration programmes to affect these risks Tiruchirapalli (India), the incidence of diarrhoea decreased is largely unknown, mainly due to the lack of outcome from 73% to 10%, and there was a reduction in the evaluations (17). According to several reviews, however, incidence of diseases such as malaria, typhoid and worm improved access to green spaces and nature has been infections (144). shown to positively affect mental health (12, 139). With regard to the social distribution of effects of interventions aimed at promoting alternative and healthier 6.3 Value for money modes of transport, they may increase health inequalities Programmes to provide affordable housing to vulnerable due to their focus on already motivated groups (81). groups are found to be beneficial in economic terms, The 20 mph zones in the United Kingdom were found to although considering the wide range of programmes mitigate widening casualty inequalities (61). and contexts, more evidence would be required. Evidence of urban development interventions in A redevelopment of former gold mining land close to lower-income countries focuses on slum upgrading and the downtown area of Johannesburg for affordable and the provision of basic services and infrastructures, such middle-income housing in South Africa, for instance, as water and sanitation. It is estimated that 99.8% of showed very positive cost–benefit ratios over a 20-year the deaths associated with unsafe water, sanitation and study period (145). The United States federal housing hygiene are in developing countries, and 90% of them choice voucher cost–benefit estimates indicate that the affect children (140). Upgrading projects in lower-income programme is likely to yield net social benefits (146). In countries tend to focus on basic service provision for the case of rental assistance for homeless and unstably vulnerable communities, including infrastructure related housed persons living with HIV in Baltimore, Chicago to water and sanitation, waste collection, housing, access and Los Angeles, the cost per QALY saved by housing roads, footpaths or storm drainage. Several recent studies services was $62 493, which compared favourably to and reviews in turn suggest that improving water quality other medical and public health services (135). in the home can make an appreciable difference to health

99 General urban improvement or development interventions There is a large body of evidence of the large economic also appear to potentially entail large quantifiable gains. benefits of public transport interventions in high- and For example, it is estimated the provision of green space some middle-income countries. A study on the benefits that prompts a 1% change in the sedentary population in of the subway system in São Paulo, Brazil, concluded the United Kingdom could have an economic value ranging that despite the elevated construction and operation from £479 million to £1442 million per year, depending on costs of the subway, when environment and social whether older people (75+) are included in the analysis values are considered, it is a profitable investment (152). (147). However, evidence in this regard remains scarce The benefits of cycle networks are estimated to be at and scattered, probably due to the difficulties entailed least 4–5 times the costs (153). Benefit–cost analyses in measuring overall costs and benefits of such often of the public transit systems of 81 urbanized areas in the United States estimate that the aggregate benefit–cost broad-scope programmes. ratio is 1.34 (154), while the analysis of rural public transit Interventions aimed at improving the internal conditions services in the state of Tennessee yields a benefit–cost of housing generally show large net benefits. A study ratio greater than 1.0 (155). estimating childhood lead poisoning prevention benefits This is particularly clear in the case of certain traffic compared to the costs involved (lead paint hazard control) calming interventions. In the United States, motor vehicle in the United States concluded that lead-safe window inspection laws and the installation of seatbelts resulted in replacement in all pre-1960 housing would yield net annual savings of $1.7 billion to $2.3 billion, and $162 per benefits of at least $67 billion (without including other vehicle, respectively, with benefits outweighing costs by benefits such as avoided attention deficit hyperactivity a factor ranging from 240 to 1727 (156). A cost–benefit disorder, other medical costs of childhood lead exposure, analysis of 20 mph zones in the United Kingdom indicates avoided special education, and reduced crime and juvenile a net present value per kilometre of road of £18 947 after delinquency in later life). A recent study evaluating its 5 years and £67 306 after 10 years when 20 mph zones long-term effects in the United States found that the are implemented in areas with one or more casualty per net economic benefit of window replacement compared kilometre of road (61, 157). It has also been estimated to window repair is $1700–$2000 per housing unit that the benefits of national implementation of intelligent (55). The cost–benefit ratio of the Housing and Health speed adaptation in the United Kingdom would be up to insulation programme in New Zealand was estimated to 15 times its costs (158). The United States nationwide be around 1.7 (148). reduction of speed limits to 65 mph has the potential to save 2985 lives every year, which amounts to around Measures to replace traditional solid fuel heating and $13 billion annual savings, including a $2 billion reduction cooking devices in developing countries also appear to in trauma care costs (159). be economically beneficial, individually and from a social perspective. Despite recent and substantiated critiques Although studies on the economic value of interventions in developing countries remain scarcer, relevant evidence about the potential benefits of these programmes (149), exists for some programmes. The global economic return a WHO cost–benefit analysis of interventions aimed at on interventions on sanitation and water is estimated to improving indoor pollution levels across countries by be $5.5 and $2 per $1 invested, respectively, while the introducing liquefied petroleum gas (LPG) or improved total global economic losses associated with inadequate stoves concluded that the financial benefits of halving water supply and sanitation were estimated at $260 billion the population without access to LPG by 2015 could annually (160). A study aiming to identify and estimate amount to roughly $91 billion per year compared the social costs and effects of a set of enforcement to net intervention costs of only $13 billion (150). strategies for reducing the burden of road traffic injuries The Mexico Patsari cookstove programme, for instance, in sub-Saharan African and South-East Asian countries showed benefit–cost ratios between 11.4:1 and 9:1 (151). concluded that the combined enforcement of speed Cost–benefit analysis also suggests that the investment limits, drink-driving laws and motorcycle helmet use in Nepal improved cookstoves was viable from both saves one DALY for a cost of $Int1000–3000 in the two household and societal perspectives (53). regions (161). 100 Chapter 6. Can urban development, housing and transport policy act as health policy?

6.4 Conclusions Based on this non-exhaustive review, the collaboration between the health and infrastructure sectors presents important Urban development, housing and transport bear relevant potential benefits. For the broad urban development sector, individual economic implications. There is a large body of paying attention to the health-related impacts of policies can evidence on the connections between the physical environment yield significantly higher returns, through improvements in where people live and their current well-being and future the sustainability of interventions and creating better living opportunities. This is particularly evident in the case of conditions. For the health sector, in turn, the improvement of the health outcomes, which appear to be largely determined by social determinants of health associated with neighbourhood accessibility to adequate housing and to healthy and safe and housing conditions and transport is key for reducing urban environments and by transport conditions. However, the health care expenditures and improving health-related presence of significant market failures, including imperfect conditions and inequalities. It has been estimated that poor information in the housing markets and public goods and housing in England costs the National Health Service up to externalities in general urban development and transport, £600 million a year (163). require the intervention of the public sector to ensure fully efficient outcomes. Box 6.1 Urban HEART The evaluation of specific interventions across all these sectors The Urban Health Equity Assessment and Response confirms the importance that they have for individual and social Tool (Urban HEART), developed by the World Health welfare. Interventions aimed at ensuring the affordability of Organization, aims to help urban policy-makers housing, such as assisted rental programmes or measures and communities better understand and tackle the to improve the internal conditions of housing, appear to have local socioeconomic factors that influence health a positive impact on varied health-related aspects. General outcomes and inequities. The tool allows actors to urban development interventions, including slum upgrading identify and change the policies that perpetuate these in developing countries, additionally show positive health inequities, and to prioritize those interventions that are effects, as well as traffic calming programmes, normally in most likely to improve health and reduce inequities, the form of reduced fatalities and injuries from accidents. directly and through modifying the underlying social However, and as with regard to other sectors, most of the hierarchies and resulting conditions in which people available evidence focuses on high-income liberal countries, grow, live, work and age. The tool is based on (a) specifically the United Kingdom and the United States. sound evidence; (b) intersectoral action for health; Interventions in these sectors are also clearly justified from an and (c) community participation. It revolves around equity perspective. This is related to their nature of basic needs, a planning and implementation cycle comprising especially in the case of housing, and the high dependency four phases: health equity assessment, response of access on affordability and therefore on socioeconomic prioritization, policy formulation, and programme circumstances. Evidence on the equity effects of programmes development and implementation. Monitoring and remains however limited, largely due to the fact that many evaluation take place during each phase. Urban of these interventions specifically target lower-income health inequities are identified in the assessment individuals and families. The WHO Urban HEART (box 6.1) phase. Evidence collected in this phase serves as the provides a potentially useful tool to effectively address health basis for raising awareness, determining solutions equity-related concerns in policy-making (162). and promoting action. The response stage involves Studies on the value for money of interventions, although identifying appropriate policies and key actors, defining generally scarce, indicate that most of the interventions goals and establishing targets. During the policy assessed entail net benefits when all potential effects stage, the most relevant interventions are prioritized are considered. This is especially the case with regard to and budgeted to ensure that they become part of interventions that improve internal housing conditions, which the local government policy-making process. Health normally imply low costs and large health-related benefits, sector programmes implementing pro-equity health and traffic calming programmes, on which most cost analyses policies are complemented by other sectors’ actions have concentrated. to bring about health equity (162).

101 Twelve key points

Efficiency-based rationales life in extreme-poverty neighbourhoods having a negative effect on a range of health outcomes, as • Urban development, transport and infrastructure measured by mortality, child and adult physical and have an impact on many aspects of personal, social mental health, and health behaviours. and economic life, for example through provision of public spaces and green areas, quality of housing, • The quality of the physical environment or provision of services, and interconnectivity and neighbourhood can exert a powerful influence on safety of transport systems. children, with those dwelling in resource-poor areas being susceptible to a range of threats, including • The health impacts of the physical environment drug abuse, premature sexual behaviour, mental in which people live are undeniable, with children and emotional problems, and low school attainment being particularly susceptible to internal housing and early drop-out. threats, such as lead or carbon monoxide poisoning, and temperature and humidity conditions; and • Assisted housing interventions, for example external threats, such as antisocial behaviour and those aimed at moving vulnerable families out of dangerous traffic. environments of concentrated poverty, can entail multiple benefits for those families, especially • Programmes aimed at improving internal housing children. conditions show positive effects for health, for example through installation of smoke alarms, • General interventions, including urban regeneration, improved cookstove interventions, and a shift from slum upgrading, and water and sanitation provision, dirt to concrete flooring. have also shown positive effects in reducing inequities, though reviews of urban regeneration • Resource- and incentive-based interventions to programmes have shown varying results. improve internal housing conditions are found to be especially beneficial for children. Value for money • Various traffic-based interventions, such as traffic- • Programmes providing affordable housing to calming infrastructure and imposition of speed vulnerable groups have been found to be beneficial, limits, appear to have been effective in reducing though more evidence is needed; general urban accidents and pollutant emissions. improvement interventions appear to entail large quantifiable gains; and interventions aimed at Equity-based rationales improving the internal conditions of housing generally • Urban development, housing and transport are key show large net benefits. determinants not only of current well-being but also • A large body of evidence exists on the economic of lifelong opportunities, with conditions such as benefits of transport-related interventions in high- poor housing, overcrowding, lack of basic services and some middle-income countries, including for and inadequate infrastructure affecting the future benefits resulting from reductions in harmful health prospects of millions of people throughout the world. impacts, though more economic evaluations are • The link between living conditions and health needed on the economic value of interventions in inequities is strongly mediated by income, with developing countries.

102 Chapter 6. Can urban development, housing and transport policy act as health policy?

total

while The social benefit–

The bulk of the .

per recipient units) while total costs are ). alue for money 146 V benefits of the Section 8 benefits are experienced by per year bear the bulk of costs annual, about $7000; net benefits cost ratio ranges from 1.1 other members of society For society as a whole, range from about $7700 to range from about $650 to $9600, $2800 per recipient case vouchers (measured in to 1.37. voucher recipients, (

argeted at low- Equity aspects income families. T economic and equity impacts

y of health, ork MTO on Y . ). ). ) 128 165 110 Other effects lower numbers of property arrest crimes overall delinquency offence index that are about one third smaller Boston MTO have Baltimore youths in No effect is found higher numbers of in New Section 8 groups in Section 8 registered values on a criminal than the control group violent arrests and ( ( (

). ventions: summar .

)

137 128 ). ). 109, 164 164 s asthma ork MTO while teen boys Y een girls in MTO Health effects lower levels of problem boys in MTO and Section problems; reductions parents reported better behaviour ( problems ( children’ attacks were reported. overall health ( adults experienced obesity and MTO adults of mental health significantly lower fewer reported behaviour resulted in large had a lower prevalence reported lower lifetime use of marijuana and reported significantly higher rates of smoking experienced fewer In Boston MTO children In New MTO and Section 8 mental health for boys. MTO and Section 8 injuries or accidents; in the treatment of improvements in Section 8 children had tobacco, tobacco ( 8 groups displayed T

with

The

housing and transport inter . ) families MTO 17 ventions vention. The . -poverty area and Description lower based inter below 50% of the participants were post-inter area median. offered a geographically contributed 30% of Resource- and incentive- subsidized ( families with income for a minimum of year rental housing costs for required to move a unrestricted housing Section 8 group was that subsidized private to remain in that area voucher their monthly income to the rental costs, the remainder being

vention vention – ype 3 Inter able 6.1 Urban development, United States High-income countries programme presence of housing no evident health sector Moving to inter Section 8 vouchers Opportunity (MTO) and T T

103

61,

The

they Cost per Five/ten years ). £78 940/£127 299. alue for money V km of road for each 20 mph per km. per km were estimated to be per km after 5 years and cost-effective after 10 years casualties per km. after the restriction was casualty areas the benefits casualty per km of road ( Five/ten years after zones had prevented casualties net present value has been when a road has over 0.7 were implemented on roads worth £23 344/£37 278 estimated to be £18 947 mean of £59 334.16 per km. in low-casualty areas, implemented in high- in areas with one or more £67 306 after 10 years 20 mph zones become zone was calculated at a 157

,

).

61

This around 48% Equity aspects prevented in the pattern of 20 mph casualties areas was larger casualties was of the decline casualties was compared to 38% areas. suggests that the number of not: registered in least has only mitigated deprived areas widening casualty most deprived in most deprived inequalities ( the decline in zone distribution Although the

Other effects on emissions is being researched. The potential impact

). 61 60, and fatalities Health effects by 42–45% for all road users, It was estimated that they reduced casualties (killed or seriously ill) by 46–54% (

). ventions that 61 y to have signs Description by terminal signs at based inter of the zone but it is not calming measures within Resource- and incentive- for individual traffic use regulation and road necessar engineering to slow traffic in 20 mph zones. the entrance and exit the zone ( The zones are marked

vention

vention – ype 2 raffic speed Inter United some Kingdom restrictions: health sector inter involvement of 20 mph zones T T

104 Chapter 6. Can urban development, housing and transport policy act as health policy?

.

) Y saved 135 . ) -related housing vices ( vices compare 148 comprising tangible vices is $62 493. alue for money V by the HIV benefit, ser accepted medical and public around $1800 per house. amounts in present value favourably (in terms of cost– health ser health and energy savings, effectiveness) to other well- dwelling ( insulation in the houses was terms to around $3110 per The cost per QAL These ser The cost of installing The total estimated tangible

argeted at Equity aspects populations. Not assessed. vulnerable T

.

)

148

vention group, verage electricity use Other effects but also by 3% for the off work for adults. control group ( Not assessed. school and in days and 2002) by 7% for Reduction in days off fell (between 2001 the inter A

y

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135 148 as well a an average emergency which can be Health effects of housing with HIV stress, assessed, of GP visits was of hospital respirator admissions ( Favourable associations room use and perceived reduction in the number registered, quantitatively linked to quality of life ( decrease in the number viral load, Although not rigorously

). 135 . ( ) information- Chicago and 148 Description persons living with HIV in programme that involved previously uninsulated assistance for homeless and unstably housed and incentive-based Resource-based rental Baltimore, Los Angeles Resource-, houses ( installing insulation in

vention

vention – vention – ype 2 ype 2 Inter United States people with programme assistance for and Health some some Rental HIV/AIDS Housing New Zealand health sector health sector inter involvement of insulation inter involvement of T T

105

The

). Y for a speeding vention 161 drink-driving Asian region – but African region, alue for money V laws and motorcycle helmet control in the South- a combined inter amount of investment. combined enforcement of cost of $Int1000–3000 in strategy that simultaneously safety laws produces the speed limits, East region – bicycle helmets in use saves one DAL enforces multiple road individual strategy varies by most health gain for a given the the two regions ( The most cost-effective

Equity aspects populations are at higher risk of accidents. experiencing traffic The most vulnerable Other effects

161,

were

75,

). Health effects long-term non-fatal bicycle helmets, and legislation and mortality speed limits/drink- Enforcement of from accidents by use and motorcycle road traffic accidents by respectively ( drive legislation, enforcement of seatbelt estimated to reduce 6%/15%/18%/19%/17% 14%/25%/11%/36%/69% 166–176

).

legislation 161 y enforcement legislation and ventions assessed Description of speed limits (via and enforcement campaigns), and primar of seatbelt use in cars, and legislation use by motorcyclists, use by bicyclists (aged drink-drive legislation enforcement of helmet enforcement of helmet Incentive-based mobile speed cameras), inter included enforcement (via breath-testing <15 years) (

vention

vention – iddle- and low-income countries ype 2 Inter burden of road M and South- countries strategies for some East Asian reducing the health sector enforcement inter involvement of Set of Sub-Saharan traffic injuries African T

106 Chapter 6. Can urban development, housing and transport policy act as health policy?

y .

)

57

This

ocabular . ) 151 diseases. which compares y Picture V s Oportunidades ). alue for money est score, 151 V between 11.4:1 and 9:1. programme had a significant programme or early on health was $437 with amount decreased 30% cookstoves ( a 36% increase in the conditional cash transfer childhood development and spent by rural households saved by each household Benefit–cost ratios were floors is a one-time $150 Peabody favourably to the effect of respirator reductions in health impacts return from $8.70 to $11.10 nutrition programmes ( when households used which translates to $131 due to the use of improved were fuelwood savings and expenditure and yields Investment of $1 in this Mexico’ $306 spent on acute the improved Patsari stove, (53% and 28% respectively). ( The cost of replacing dirt The yearly amount of money The largest contributors T

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57

178

178

est y T On a yearly . The degree of

ocabular Other effects per day basis women can spend an average of 840 kg of cooking time per saved an average of standard adult per year can take advantage of associated with notable cognitive development: a 36% improvement Households exclusively fuelwood per adult fuelwood and LPG score. scale and perceived stress scales are significantly lower in the using fuelwood saved household was 1 hour while those using higher and depression with quality of life is maternal satisfaction improvements in child in the Peabody Picture year (67% reduction) time in the kitchen and this time saved ( treated children show treatment group ( 548 kg fuelwood per 365 hours less of their (65% reduction) ( V The average reduction The programme is 18.4 percentage points

.

)

y disease 151 and Eye discomfort . ) 57 Health effects presence of parasites, point reduction in the acute respirator adoption. associated with an a 1.8 percentage point of diarrhoea, an 8.3 percentage Patsari stove ( households with was reduced from 74% with the traditional stove was reduced from 70% decrease in episodes members suffering from in households using incidence of anaemia to 30% with Patsari the traditional open fire to 8% when using the ( The percentage of The programme is 18.2% reduction in the

.

)

57

y approach vention ). 177 vention that offered 151, Description based inter participator aimed at encouraging called “Patsari”, cement flooring ( Resource- and incentive- floors up to 50 square with an efficient woodburning cookstove households with dirt developed with a Incentive-based metres of concrete inter the replacement of traditional cookstoves to meet the needs of the targeted households (

vention

vention – vention – ype 2 ype 2 Inter cookstoves some Patsari some Piso Firme health sector health sector Mexico improved inter involvement of Mexico inter involvement of T T

107

alue for money V Not assessed.

argeted at Equity aspects populations. vulnerable T Other effects Not assessed.

ASEP villages W . ) ASEP villages had a 179 Health effects living in odds ratio for having diarrhoea than children W Children not living in 33% higher adjusted (

).

179

information- and awareness vention designed Description package of activities and incentive-based and household levels, and practices about Resource-, sanitation facilities and hygiene behaviour ( water supply at village inter to deliver an integrated to improve potable their use,

vention

vention – The table describes impacts from a non-exhaustive list of programmes with the aim covering examples different regions world and development or welfare contexts.

ASEP) ater and ype 1/2 Inter some Extension Programme Pakistan health sector inter involvement of Sanitation W (W T Note:

108 Chapter 6. Can urban development, housing and transport policy act as health policy?

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113 164. Orr L et al. Moving to Opportunity interim impacts evaluation. 172. Orsay E et al. Motorcycle trauma in the state of Illinois: analysis Washington, DC, United States Department of Housing and Urban of the Illinois Department of Public Health trauma registry. Annals Development, Office of Policy Development and Research, 2003. of Emergency Medicine, 1995, 26:455–460. 165. Ludwig et al. Urban poverty and juvenile crime: evidence from 173. Haileyesus T et al. Cyclists injured while sharing the road with a randomized housing-mobility experiment. Quarterly Journal motor vehicles. Injury Prevention, 2007, 13:202–206. of Economics, 2001, 116:655–679. 174. Thompson DC et al. Effectiveness of bicycle safety helmets in 166. Elvik R et al. Speed and road accidents: an evaluation of the Power preventing head injuries: a case-control study. Journal of the Model. Report No. 740. Oslo, Institute of Transport Economics, American Medical Association, 1996, 276:1968–1973. 2004. 175. Robinson DL. No clear evidence from countries that have 167. Rehm J et al. Alcohol use. In: Ezzati M, eds. Comparative enforced the wearing of helmets. British Medical Journal, 2006, quantification of health risks: global and regional burden of 332:722–725. disease due to selected risk factors. Geneva, World Health 176. A ttewell RG et al. Bicycle helmet efficacy: a meta-analysis. Organization, 2004:959–1108. Accident Analysis and Prevention, 2001, 33:345–352. 168. Shults R et al. Reviews of evidence regarding interventions to 177. Masera O et al. Impact of “Patsari” improved cookstoves on reduce alcohol-impaired driving. American Journal of Preventive indoor air quality in Michoacan, Mexico. Energy For Sustainable Medicine, 2001, 21(Suppl. 4):66–88. Development, 2007, 11:45–56. 169. Peek-Asa C. The effect of random alcohol screening in reducing 178. Berrueta VM et al. Energy performance of wood-burning cookstoves motor vehicle crash injuries. American Journal of Preventive in Michoacan, Mexico. Renewable Energy, 2008, 33:859–870. Medicine, 1999, 16(Suppl. 1):57–67. 179. Nanan et al. Evaluation of a water, sanitation, and hygiene 170. Kelly P et al. A prospective study of the impact of helmet usage education intervention on diarrhoea in northern Pakistan. Bulletin on motorcycle trauma. Annals of Emergency Medicine, 1991, of the World Health Organization, 2003, 81(3):160–165. 20:852–856. 171. Shankar BS et al. Helmet use, patterns of injury, medical outcome, and costs among motorcycle drivers in Maryland. Accident Analysis and Prevention, 1992, 24:385–396.

114 Annex A. Looking beyond GDP: broader measures of well-being, welfare and prosperity

ew measures of well-being, welfare and prosperity happier with a higher level of income inequality than if that go beyond GDP and attach increasing relevance perceived levels of social mobility are low. to equity and its associations with efficiency concerns N The economic crisis, among other recent trends (climate have been developed in recent years. A significant increase in academic research on well-being can be noted since change, energy crisis) has strengthened this new strand the mid-1970s, particularly expanding in the last decade of study. The new lines of work that approach welfare, (1, 2). Many cite Easterlin’s 1974 paper on whether prosperity and progress from a broader perspective have economic growth improves the human lot as a precursor quickly expanded in these years, and are turning an in this field of research (3). The paper concludes that issue that was considered marginal into the mainstream. economic growth in a country does not necessarily lead The perception and evidence on the unsustainability to a rise in average levels of happiness, sparking a new of current development patterns strictly based on interest that grew rapidly from the mid-1990s onwards. GDP growth are mounting, and although institutional Since then, many authors have approached the study of obstacles to significant changes persist, an increasing the connections between income, equality and well-being. number of experts and organizations are advocating and Although the evidence on the relationship between income requesting political advance towards more inclusive and inequality and well-being has been mixed, it seems that environmentally concerned economic growth. most studies find a negative relationship between income International efforts to develop more encompassing inequality and well-being (4, 5). Where authors find a measures of well-being have multiplied in recent years as relationship, it seems to hold across countries (6, 7), a result. At the European level, the European Commission across states in the United States (8) and in cross-city issued a communication on “GDP and beyond” in 2009, comparisons (9). Schwarze and Härpfer (10) used the identifying key actions to improve current metrics of life satisfaction question of the German Socio-Economic progress, and established five key targets to guide Panel survey and regional Gini inequality indices and found its policies in the European Union 2020 Strategy (17). that the well-being of Germans is adversely affected by To support these processes, the Statistical Office of inequality. The results of Winkelmann and Winkelmann the European Communities (Eurostat) and the French (11) strongly suggest that increased inequality lowers National Institute of Statistics and Economic Studies the income satisfaction of middle-class individuals, (INSEE) initiated a process to develop recommendations ceteris paribus, given own income, in Switzerland. This for the European Statistical System. The United Nations relationship seems to hold for children’s well-being, as Economic Commission for Europe, in cooperation with the average levels of children’s well-being appear to be the OECD and Eurostat, is pursuing work on measuring negatively correlated with both levels of income inequality sustainable development, aiming to develop better metrics and the percentage of children living in relative poverty for human well-being and sustainability (18). (12–14). Several countries have consequently launched initiatives Other studies indicate the relationship may be causal related to broader measurement of well-being. These and depends on the perception of social mobility or efforts have taken the form of public consultations opportunity. Using General Social Survey data from 1972 (United Kingdom), parliamentary commissions (Germany, to 2008, Oishi et al. (15) found that Americans were on Norway), national round tables (Italy, Slovenia, Spain), average happier in the years with less income inequality initiatives for integrating and disseminating statistics than in the years with more income inequality. They also on a jurisdiction’s economic, social and environmental demonstrated that the inverse relation between income conditions (United States), dedicated statistical reports inequality and happiness was explained by perceived (Australia, Ireland) and a range of other initiatives (China, fairness and general trust. However, the effect of income France, Japan, Republic of Korea). The OECD Better Life inequality on subjective well-being seems to partly Initiative is coordinating and supporting the different depend on real or perceived social mobility (8, 16), so national programmes (19). The publication of the 2011 that if individuals perceive there is a good opportunity Compendium of OECD well-being indicators and the for social mobility, they will tolerate and therefore feel development of the Better Life Index respond to the

115 growing demand for measuring well-being and progress Reference publications aimed at the general, rather than within the international statistical community (20). specialized, public in this regard in the last few years have multiplied ( ). An initiative that has gathered international attention and 24–29 helped set an agenda for European countries is represented Despite the fact that these new trends have not yet by the report of the Commission on the Measurement translated into practical policy actions, they bear significant of Economic Performance and Social Progress (21). implications for the discussion on interventions aimed The final report concluded that the conventional measure at addressing the social determinants of health. Equity of GDP does not accurately reflect the overall economic concerns are in this sense a central and common element and social situation and future prospects, because to all these evolving approaches and theories, as a major (among other factors) it does not provide any indication determinant of social and individual well-being and of of how the distribution of income is evolving. The lack economic prosperity. The public debate on these issues of adequacy of the measures on which policy-makers does not seem to have permeated the policy-making make their decisions partly explains, according to the sphere, despite all coordinated efforts, in the context authors, the fact that the financial and economic crisis of the economic crisis and its emergency requirements. was not properly forecast. The report recommends that In fact, many of the policy actions adopted recently subjective measures of the quality of life should be in Europe are in clear contradiction with them, which collected by governments, and has played an important suggests that the window of opportunity that the crisis role in creating the widespread perception that measuring offered to make substantial changes in this direction has subjective well-being is a proposal worthy of serious been somehow missed. policy attention (21). Another early research effort in this direction was References represented by the Prosperity without growth? report prepared by the (now defunct) Sustainable Development 1. Abdallah S et al. Estimating worldwide life satisfaction. Ecological Economics, 2008, 65:35–47. Commission of the United Kingdom (22). This publication went beyond the subject of measurement, and questioned 2. MacKerron G. Happiness economics from 35,000 feet. Journal of Economic Surveys, 2012, 26(4):705–735. the feasibility of transiting to a functional economic and social paradigm that is not strictly based on conventional 3. Easterlin RA. Does economic growth improve the human lot? Some empirical evidence. In: David PA, Reder MW, eds. Nations economic growth from a macroeconomic perspective. and households in economic growth: essays in honor of Moses Sustainable development is defined in the report on the Abramowitz. Academic Press, 1974. basis of improving citizens’ living conditions based on 4. Berg, M, Veenhoven R. Income inequality and happiness in their expectations, which necessarily affects inequality 119 nations: in search for an optimum that does not appear to concerns and social aspects that are intertwined with exist. In: Greve B, ed. Social policy and happiness in Europe. equity. In 2010 the United Kingdom Government mandated Cheltenham, Edgar Elgar, 2010. the Office for National Statistics to start measuring 5. Bjørnskov C et al. Analysing trends in subjective well-being in 15 subjective well-being and constructing an index of European countries, 1973–2002. Journal of Happiness Studies, national well-being, which would be finalized following 2008, 9:317–330. public and expert consultation (23). 6. Diener E et al. Factors predicting the subjective well-being of nations. Journal of Personality and Social Psychology, 1995, Arguments in favour of changes in political priorities 69:851–864. towards higher equity and sustainability are progressively 7. Helliwell JF, Wang S. Trust and wellbeing. International Journal becoming embedded in public debates, particularly in of Wellbeing, 2011, 1(1):42–78. industrialized societies. The growing work of experts 8. Alesina A et al. Inequality and happiness: are Europeans across different disciplines who have produced various and Americans different? Journal of Public Economics, 2004, publications emphasizing the role of equity concerns 88(9–10):2009–2042. for overall development and advocating a change in economic growth patterns is also driving this trend.

116 Annex A. Looking beyond GDP: broader measures of well-being, welfare and prosperity

9. Hagerty MR. Social comparison of income in one’s community: 19. The OECD Better Life Initiative. Statistics Newsletter, 2011, Issue evidence from national surveys of income and happiness. Journal No. 52. of Personality and Social Psychology, 2000, 78:764–771. 20. Compendium of OECD well-being indicators. OECD Better 10. Schwarze J, Härpfer M. Are people inequality averse, and do Life Initiative. Organisation for Economic Co-operation and they prefer redistribution by the state? Evidence from German Development, 2011. longitudinal data on life satisfaction. Journal of Scio-Economics, 21. S tiglitz JE et al. Report by the Commission on the Measurement 2007, 36:233–239. of Economic Performance and Social Progress. Commission on 11. Winkelmann R, Wilkenmann L. Does inequality harm the middle the Measurement of Economic Performance and Social Progress, class? Kyklos, 2010, 63:301–316. 2009. 12. Bradshaw J, Richardson D. An index of child well-being in Europe. 22. Prosperity without growth? The transition to a sustainable economy. Child Indicators Research , 2009, 2(3):319–351. United Kingdom, Sustainable Development Commission, 2009. 13. Pickett KE, Wilkinson RG. Child well-being and income inequality: 23. W aldron S. Measuring subjective well-being in the UK. Working an ecological study of rich societies. BMJ, 2007, 335:1080–1068. Paper. Office for National Statistics, 2010. 14. Statham J, Chase E. Childhood wellbeing: a brief overview. 24. Judt T. Ill fares the land. Allen Lane, 2010. Briefing Paper No. 1. Childhood Wellbeing Research Centre, 25. Hacker JS, Pierson P. Winner-take-all politics. Simon & Schuster, 2010. 2011. 15. Oishi S et al. Income inequality and happiness. Association for 26. Hutton W. Them and us: changing Britain – why we need a fair Psychological Science, 2011, 22(9):1095–1100. society. Little, Brown & Company, 2010. 16. Alesina A, La Ferrara E. Preferences for redistribution in the land 27. Stiglitz JE. The price of inequality: how today’s divided society of opportunities. Working Paper No. 1936. Harvard Institute of endangers our future. WW Norton & Company, 2012. Economic Research, 2001. 28. Wilkinson RG, Pickett K. The spirit level: why equality is better 17. GDP and beyond: measuring progress in a changing world. for everyone. Allen Lane, 2009. Communication from the Commission to the Council and the European Parliament. European Commission, 2009. 29. Milanovic B. The haves and the have-nots. Basic Books, 2010. 18. Measuring sustainable development. United Nations Economic Commission for Europe, in cooperation with OECD and Eurostat. New York and Geneva, United Nations, 2009.

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Annex B. Commission on Social Determinants of Health recommendations

General Action Recommendations objectives areas 1. Improve Early child Ensure policy coherence for early child development the development Build universal coverage of comprehensive package of quality early child development conditions of programmes and services for children, mothers and other caregivers, regardless daily life of ability to pay Provide quality education focused on children’s physical, social/emotional, and language/cognitive development, from pre-primary school Provide quality compulsory primary and secondary education for all boys and girls, regardless of ability to pay, identify and address the barriers to girls and boys enrolling and staying in school, and abolish user fees for primary school Urban devel- Establish local participatory governance mechanisms for communities and local opment government to partner in building healthier and safer cities Ensure greater availability of affordable quality housing Plan and design urban areas to promote physical activity through investment in active transport; encourage healthy eating through availability of and access to food; and reduce violence and crime through good environmental design and regulatory controls, including control of the number of alcohol outlets Rural devel- Develop and implement policies and programmes that focus on issues of rural land opment tenure and rights; year-round rural job opportunities; agricultural development and fairness in international trade arrangements; rural infrastructure, including health, education, roads and services; and policies that protect the health of rural-to-urban migrants Climate Consider the health equity impact of agriculture, transport, fuel, buildings, industry change and waste strategies concerned with adaptation to and mitigation of climate change Employment Full and fair employment and decent work as shared objective of international institutions and a central part of national policy agendas and development strategies, with strengthened representation of workers in the creation of policy, legislation and programmes relating to employment and work Develop and implement economic and social policies that provide secure work and a living wage that takes into account the real and current cost of living for health Public capacity strengthened to implement regulatory mechanisms to promote and enforce fair employment and decent work standards for all workers Reduce insecurity among people in precarious work arrangements, including informal work, temporary work and part-time work through policy and legislation to ensure that wages are based on the real cost of living, social security and support for parents Occupational health and safety policy and programmes applied to all workers – formal and informal – and the range expanded to include work-related stressors and behaviours as well as exposure to material hazards Social protec- Build universal social protection systems and increase their generosity towards a tion level that is sufficient for healthy living Use targeting only as back-up for those who slip through the net of universal systems Ensure that social protection systems extend to include those who are in precarious work, including informal work and household or care work

119 General Action Recommendations objectives areas 1. Improve Universal Build health care services on the principle of universal coverage of quality services, the health care focusing on primary health care conditions Ensure public sector leadership in health care system financing, focusing on tax- and of daily life insurance-based funding, ensuring universal coverage of health care regardless of (Next) ability to pay, and minimizing out-of-pocket health spending Increase investment in medical and health personnel, balancing health–worker density in rural and urban areas Address the health human resources brain drain, focusing on investment in training and bilateral agreements to regulate gains and losses 2. Tackle the Mainstreaming Parliament and equivalent oversight bodies adopt a goal of improving health equity inequitable health equity through action on the social determinants of health as a measure of government distribution in all policies performance of power, and systems Establish a whole-of-government mechanism that is accountable to parliament, money and chaired at the highest political level possible resources Institutionalization of monitoring of social determinants and health equity indicators, and health equity impact assessment of all government policies, including finance Expansion of health sector policy and programmes in health promotion, disease prevention, and health care to include a social determinants of health approach, with leadership from the minister of health WHO supports the development of knowledge and capabilities of national ministries of health to work within a social determinants of health framework, and to provide a stewardship role in supporting a social determinants approach across government Fiscal policy Build and strengthen national capacity for progressive taxation New national and global public finance mechanisms developed, including special health taxes and global tax options Donor countries honour existing commitments by increasing aid to 0.7% of GDP; expand the Multilateral Debt Relief Initiative; and coordinate aid use through a social determinants of health framework International finance institutions ensure transparent terms and conditions for international borrowing and lending, to help avoid future unsustainable debt Establish a cross-government mechanism to allocate budget to action on social determinants of health Public resources equitably allocated and monitored between regions and social groups, for example using an equity gauge

120 Annex B. Commission on Social Determinants of Health recommendations

General Action Recommendations objectives areas 2. Tackle the Market WHO, in collaboration with other relevant multilateral agencies and supporting inequitable responsibility Member States, institutionalizes health equity impact assessment, globally and distribution nationally, of major global, regional and bilateral economic agreements of power, Ensure and strengthen representation of public health in domestic and international money and economic policy negotiations resources Strengthen public sector leadership in the provision of essential health-related (Next) goods/services and control of health-damaging commodities Gender equity Create and enforce legislation that promotes gender equity and makes discrimination on the basis of sex illegal Set up within the central administration and provide adequate and long-term funding for a gender equity unit that is mandated to analyse and to act on the gender equity implications of policies, programmes and institutional arrangements Include the economic contribution of household work, care work and voluntary work in national accounts and strengthen the inclusion of informal work Invest in expanding girls’ and women’s capabilities through investment in formal and vocational education and training Support women in their economic roles by guaranteeing pay equity by law, ensuring equal opportunity for employment at all levels, and by setting up family-friendly policies that ensure that women and men can take on care responsibilities in an equal manner Increase political commitment to and investment in sexual and reproductive health services and programmes, building to universal coverage Political National government strengthens the political and legal systems to ensure they empowerment promote the equal inclusion of all National government acknowledges, legitimizes and supports marginalized groups, in particular indigenous peoples, in policy, legislation and programmes that empower people to represent their needs, claims and rights Ensure the fair representation of all groups and communities in decision-making that affects health, and in subsequent programme and service delivery and evaluation Empowerment for action on health equity through bottom-up, grass-roots approaches, with support for civil society to develop, strengthen and implement health equity- oriented initiatives Global By 2010, the Economic and Social Council, supported by WHO, prepares for governance consideration by the United Nations the adoption of health equity as a core global development goal By 2010, the Economic and Social Council, supported by WHO, prepares for consideration by the United Nations the establishment of thematic social determinants of health working groups Institutionalization by WHO of a social determinants of health approach across all working sectors, from headquarters to country level

121 General Action Recommendations objectives areas 3. Measure Monitoring, Ensure that all children are registered at birth without financial cost to the household the problem, training and Establish national health equity surveillance systems, with routine collection of data evaluate research on social determinants of health and health inequity action, WHO stewards the creation of a global health equity surveillance system as part expand the of a wider global governance structure knowledge Research funding bodies create a dedicated budget for generation and global base, sharing of evidence on social determinants of health and health equity, including develop a health equity intervention research workforce Make the social determinants of health a standard and compulsory part of training that is of medical and health professionals trained in Act to increase understanding of the social determinants of health among non- the social medical professionals and the general public determinants Build capacity for health equity impact assessment among policy-makers and of health, planners across government departments and raise WHO strengthens its capacity to provide technical support for action on the social public determinants of health globally, nationally and locally awareness about the social determinants of health

122 Annex C. Literature review: methodology

1. Initial search 2. Screening Based on the proposed scoping review methodology of The screening stage identified articles/studies describing Shankardass (2010),20 scholarly and grey literature was evidence, both direct and indirect, on the impact or systematically searched for direct and indirect evidence potential impact of policy interventions in the above- of the impact of interventions in the sectors of early child mentioned sectors with implications for health, health development, housing, transport, social protection and equity, other economic-related outcomes and/or involving education. cost–benefit or cost–effectiveness analysis. The screening was conducted based on the presence of the criteria Search terms described in box C.1. A member of the research team A purposely broad list of key word combinations and participated in a multistep process to review abstracts – phrases was used, including (but not limited to)*: or in the case of some grey literature and some articles • “health equity” where the criteria could not be examined, full documents • “cost–benefit analysis” – to identify relevant studies. • “cost–effectiveness analysis” • “intervention impact” • previous four and “health”, or “education” or “social Box C.1 Screening criteria protection / insurance / assistance / transfers”, or A resource was initially included in the review if it “transport” or “housing” or “children / early child dealt with the sectors of transport, education, housing, development” health, social protection and early child development. • “early child development / transport / housing / education / social protection” and “health” or “economic”. Whether the resource alternatively: * also in Spanish in SCIELO, PAIS. • assessed the impact of interventions on health/ health equity or the association between sector- Online databases/search engines and organizations/ related outcomes and health outcomes using journals websites used included: quantitative methods described in chapter 3; • International Bibliography of the Social Sciences • assessed the impacts of interventions on educational/ • PubMed labour market/macroeconomic outcomes or the • PAIS International • EconLit association between sector-related variables • Scientific Electronic Library Online (SCIELO) and educational/labour market/macroeconomic • ScienceDirect outcomes using quantitative methods described • Cochrane in chapter 3. • IDEAS/RePec Specific attention was paid to cost–benefit and cost– • Social Science Research Network effectiveness analysis as compared to simple costings. • International Initiative for Impact Evaluation • NBER • World Bank • Lancet • Child Care and Early Education Research Connections • Education Resources Information Center. Specialized journals have been reviewed under each specific sector.

20 Shankardass K et al. A scoping review of intersectoral action for health equity involving governments. International Journal of Public Health, 2012, 57(1):25–33.

123 3. Sorting Literature referring to interventions or economic impact analysis was then sorted by the research team by: • date • sector • source • whether it was a focused study or a review. Only studies published after 1990 were included for the purpose of the report.

4. Scoping A table for more comprehensive extraction of information was developed. The scoping table was applied to specific studies to describe specific confirmed cases, often following a full review of the article. It included the following scoping categories: • reference information, including author, title, date and publisher • sector of focus: early child development, education, health, social protection, urban development, housing and transport • whether the evidence presented is direct or indirect: evaluation of particular intervention impacts or general economic arguments for interventions • country of study • local or national focus of the study/intervention • level of income, according to the World Bank classification for lending (http://data.worldbank.org/ about/country-classifications/country-and-lending- groups) • type of welfare state, based on Muntaner 2010 (Integrating labour market and health service typologies – welfare regime implications for Health in All Policies and intersectoral action for health, WHO) • intervention description/summary of objectives • health and health equity impacts • other impacts, other equity impacts • methodology (when available) • cost–benefits (if studied) • search engine.

124 For more information on the work of WHO on social determinants of health, please visit www.who.int/social_determiants/en/